Intel Corp. shares surged nearly 9% Friday after the chipmaker posted its strongest earnings since 2023, signaling early success in CEO Lip-Bu Tan's sweeping turnaround plan that combines aggressive cost cuts, strategic investments, and a renewed focus on artificial intelligence.
The company reported adjusted third-quarter earnings of $0.23 per share on $13.7 billion in revenue, exceeding Wall Street expectations and lifting its non-GAAP gross margin to roughly 40%. The results mark a significant rebound for Intel, which last year suffered its first annual loss in nearly four decades amid mounting competition from Nvidia and AMD.
Investors cheered Tan's operational overhaul, which includes trimming more than 20% of the workforce, selling a majority stake in Altera, and tightening capital expenditures. "Intel has turned a corner and is steadying the ship," said Ben Bajarin, CEO of Creative Strategies. "It feels like a strong setup for 2026."
The revival has been bolstered by multi-billion-dollar investments from Nvidia, Japan's SoftBank, and a U.S. government stake that provided both liquidity and credibility to Intel's restructuring. The company's stock has now climbed over 90% in 2025-outpacing both Nvidia and AMD-and trades at a forward price-to-earnings ratio of 71.5, compared with 30.5 for Nvidia and 40.1 for AMD.
Demand for Intel's chips is exceeding supply, particularly in data centers, where customers are upgrading CPUs to handle AI workloads. However, Chief Financial Officer Dave Zinsner cautioned that manufacturing yields for Intel's advanced 18A process remain below industry norms and are not expected to reach "acceptable levels" until 2027.
Tan, who took over after years of heavy spending by his predecessor, has sought to reposition Intel as a leaner and more focused enterprise. "We understand the desire to claim victory for the embattled company, but this fight is far from over; perhaps it's better to call it a draw for now," analysts at Bernstein wrote.
