Intel’s third-quarter results on Thursday will show whether a clutch of recent high-profile investments can shore up its strained finances as new CEO Lip-Bu Tan attempts to revive the ailing chipmaker.<\/p>\n
Multi billion-dollar investments from Nvidia and Japan’s SoftBank as well as an unprecedented US government stake during the September quarter provided bright spots in Intel’s long-running turnaround.<\/p>\n
The investments have helped its shares double in value this year and outpace gains in AI darling Nvidia, setting a high bar for the company expected to report a 1% drop in third-quarter sales to $13.14 billion according to LSEG data.<\/p>\n
Joe Tigay, portfolio manager at Intel investor Equity Armor, said investors would be closely looking for progress on the company’s broader strategy.<\/p>\n
“Putting all (recent investments) together – What does Intel’s big picture look like? What does their cash look like?” Tigay said.<\/p>\n
Cash boost, earnings dilution<\/p>\n
Nvidia said last month it would invest $5 billion in Intel, giving it an about 4% stake after new shares are issued. In August, Intel secured another $2 billion from SoftBank.<\/p>\n
After US President Donald Trump called for CEO Lip Bu Tan’s resignation over China ties, a hastily arranged Washington meeting produced an unusual deal involving the US government taking a 10% stake for $8.9 billion.<\/p>\n
The moves hand Intel a critical cash lifeline after ousted CEO Pat Gelsinger’s manufacturing expansion strained margins following years of missteps.<\/p>\n
But scant details on the deals have left Wall Street waiting for clarity on their potential benefits.<\/p>\n
The company is expected to record a per-share loss of 22 cents in the third quarter, and adjusted per-share earnings of 1 cent.<\/p>\n
Intel’s per-share earnings in the September quarter could be impacted by share dilution from the government deal and depending on the close of Nvidia and Softbank’s agreements, per-share profit could be hurt in the fourth quarter, said Ryuta Makino, analyst at Intel investor Gabelli Funds.<\/p>\n
“It will lead to dilution, but in my opinion, share dilution is the least of Intel shareholders’ worries.”<\/p>\n
Problems persist but end markets expanding<\/p>\n
While they’re seen as a vote of confidence in Intel’s future, analysts and investors agree the recent funding deals don’t alleviate Intel’s long-standing issues.<\/p>\n
Intel has been consistently losing share in the personal computer and server central processing unit (CPU) market to AMD, while Arm-based architecture poses a threat to its legacy x86 chip blueprint.<\/p>\n
However, overall end-market demand is improving as a Windows refresh cycle boosts sales, with preliminary results from research firm Gartner showing an 8% boost in worldwide third-quarter PC shipments.<\/p>\n
Intel’s PC chip unit is expected to log an 11% jump to $8.12 billion, amid a ramp up in production of its Panther Lake PC processor – the first chip made on its 18A manufacturing technology – with the initial units slated to ship before end-2025.<\/p>\n
The success of its 18A manufacturing node is instrumental to Intel’s contract manufacturing business, after Tan significantly pared back his predecessor Gelsinger’s hefty expansion plans.<\/p>\n
The manufacturing segment is expected to report flat revenue at $4.37 billion in the third quarter.<\/p>\n
Analysts expect sales in Intel’s data center unit to grow 18% to $3.95 billion.<\/p>\n
While Intel has failed to gain traction in the booming artificial intelligence graphics processor industry dominated by Nvidia, the rapid build-out of data center capacity has expanded the market for its server CPUs used alongside GPUs.<\/p>\n
Intel revived efforts to make its mark on the GPU market with a new AI chip for data centers slated for launch next year.<\/p>\n
“The markets are giving Intel a major pass on their current struggles,” said Equity Armor’s Tigay.<\/p>\n
“Intel has a great deal of leeway based on the expectations of what the new partnerships will bring and their new product designs.”<\/p>\n","protected":false},"excerpt":{"rendered":"
Intel’s third-quarter results on Thursday will show whether a clutch of recent high-profile investments can shore up its strained finances as new CEO Lip-Bu Tan attempts to revive the ailing chipmaker. Multi billion-dollar investments from Nvidia and Japan’s SoftBank as well as an unprecedented US government stake during the September quarter provided bright spots in Intel’s long-running turnaround. The investments have helped its shares double in value this year and outpace gains in AI darling Nvidia, setting a high bar for the company expected to report a 1% drop in third-quarter sales to $13.14 billion according to LSEG data. Joe […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-968953","post","type-post","status-publish","format-standard","hentry","category-it-2"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/968953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=968953"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/968953\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=968953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=968953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=968953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}