A strong Q3 fueled by major investments and cost-cutting gives Intel new momentum — now all eyes are on whether its foundry division can deliver long-term growth
Intel’s Q3 Comeback: Profits, Investments, and Optimism
Intel surprised Wall Street on Thursday with a stronger-than-expected Q3, posting $4.1 billion in net income on $13.7 billion in revenue, a major turnaround from its $16.6 billion loss in the same period last year.
- Quarterly revenue rose by $800 million compared to Q2.
- The company also added $20 billion to its balance sheet, boosted by strategic investments and asset sales.
CEO Lip-Bu Tan, who took the helm to engineer Intel’s turnaround, emphasized that the improved balance sheet gives the company “greater operational flexibility” to execute its multi-year transformation strategy.
Strategic Investments Fuel the Turnaround
Three major investments over the last quarter have fortified Intel’s financial position:
- SoftBank: $2 billion in August
- U.S. Government: A historic 10% equity stake, with $5.7B of the planned $8.9B already delivered
- Nvidia: $5 billion investment in September as part of a strategic chip development partnership
Intel also sold off its stakes in:
- Altera (acquired in 2015): $5.2 billion deal finalized in September
- Mobileye, its autonomous driving unit
These divestitures were part of Tan’s aggressive strategy to cut costs and refocus on core operations, particularly manufacturing and R&D.
“I’m honored by the trust and confidence President Trump and Secretary [Howard] Lutnick have placed in me,” said Tan. “Their support highlights Intel’s strategic role as the only U.S.-based semiconductor company with leading-edge logic and manufacturing.”
The Foundry Business: Intel’s Next Big Test
Despite the solid quarter, analysts are laser-focused on Intel’s foundry business, which has long been a drag on growth and strategy execution.
- Tan initiated significant layoffs in the division this summer.
- A condition of the U.S. government’s investment requires Intel to retain and develop its foundry arm for at least five years — or face penalties.
The foundry unit, which produces custom chips for external clients, is seen as critical to Intel’s long-term competitiveness, especially as chip design shifts toward more modular and customizable architectures.
“Building a world-class foundry is a long-term effort founded on trust,” Tan said.
“We must learn to delight our customers… to meet all their needs for performance, yield, cost, and schedule.”
Still, Tan provided few specifics, only noting that Intel is “actively engaging” with potential foundry customers and intends to grow the division with discipline.
Analysts Say Strategy — Not Cash — Is the Missing Link
While Intel’s balance sheet is now healthier than it’s been in years, investors and analysts are clear: Money alone won’t fix the foundry problem.
- Analysts told TechCrunch in August that Intel doesn’t lack capital, but rather a clear, executable strategy for becoming a trusted foundry partner.
- Competing foundries like TSMC and Samsung still dominate due to better process technology, reliability, and customer trust.
Intel’s challenge is to prove it can compete at scale — not just with performance, but also in customer experience, consistency, and efficiency.
Looking Ahead: Optimism Tempered by Execution Risk
With strong Q3 earnings, a bolstered balance sheet, and backing from government and industry giants, Intel has a clear runway to execute its vision. But the foundry division remains the linchpin for sustained, long-term growth.
If Tan can revive Intel’s foundry reputation and secure major external clients, the company could reclaim its place as a top-tier chip manufacturing leader. But for now, Wall Street remains cautious, watching closely for concrete results — not just promises.
