Intel’s Q3 Earnings: The Comeback nobody saw coming.

So here’s the thing about Intel right now—it’s having one of those comeback moments that honestly nobody could have predicted at the start of the year. I’ve been critical of Intel since it received $8 billion in grants (taxpayer money) from the Biden Administration and months after receiving those funds, having to replace its CEO, Pat Gelsinger. Intel just released its Q3 2025 earnings, and while we’ve all gotten used to Intel struggling through rough quarters, this one actually had some genuinely good news. Let’s talk numbers first.

Revenues & EPS

Intel pulled in $13.7 billion in revenue for the quarter, which is up 3% year-over-year. Not explosive growth, but considering where they’ve been? It’s progress. What really caught people off guard was the earnings per share—they posted $0.23 EPS when Wall Street was expecting $0.02. That’s not just beating expectations, that’s crushing them. The stock’s been on an absolute tear this year—up 87% year-to-date as of the earnings call. That’s the kind of run you’d normally associate with an AI startup, not a legacy chipmaker that’s been getting pummeled by NVIDIA and AMD for years. But here we are.

The PC Business Is Actually… Good?

Here’s something I didn’t expect to write in 2025: Intel’s PC chip business is doing well. The Client Computing Group brought in $8.5 billion in revenue, up 5% from last year, with an impressive 31.6% operating margin. That’s solid profitability.

What’s driving it?

1) A massive Windows 11 refresh cycle happening as businesses finally get around to upgrading their fleets.

2) AI Personal Computer aspirations are starting to gain some actual traction—turns out people are interested in laptops that can run AI features locally. Who knew? The PC market has been declared dead often over the last decade, but it keeps finding ways to stay relevant.

3) The Data Center story gets more interesting by the day. Now, the Data Center and AI segment is where things get a bit more complicated. Revenue came in at $4.1 billion, which is actually down 1% year-over-year. Not great. But, operating margin jumped from 9.2% last year to 23.4% this quarter. That’s a massive improvement, and it suggests Intel is finally getting its act together on the profitability front even if they’re not winning every single deal out there. The company’s banking hard on AI-driven infrastructure refreshes. Every time a hyperscaler (Google, Meta, Amazon, Oracle) decides they need more computing power for their latest AI project, Intel wants to be supplying those processors. Are they winning every battle against AMD and the custom silicon crowd (Broadcom/Marvell)? No. But they’re IN the fight, and that’s what matters for right now.

4) The Foundry: Still Bleeding, But Less. So let’s address the elephant in the room: Intel Foundry. It’s been a disappointment. This is the business unit where Intel manufactures chips for other companies—or at least tries to. It’s the heart of CEO Lip-Bu Tan’s grand turnaround strategy, the area that’s supposed to make Intel relevant again in a world where TSMC dominates manufacturing. The numbers here are… not pretty.

The Foundry business pulled in $4.2 billion in revenue but posted an operating loss of $2.3 billion. That’s a negative 54.8% operating margin. The foundry business is losing more than half of every dollar in revenue. But here’s the thing: that’s actually an improvement from the negative 71.7% margin they had last quarter. I know—celebrating a smaller loss is no victory. However, when you’re trying to build an entirely new business model that requires tens of billions in capital investment, you’ve got to look for any signs of progress you can.

Intel claims they’ve started production of their most advanced chips in Arizona, and there are rumors that Microsoft has committed to using Intel’s 18A process for an AI chip. If that pans out, it could be huge.

5) The Government Lifeline: Let’s not kid ourselves and be honest about what’s driving a lot of this optimism: Intel isn’t doing this alone anymore. The U.S. government took a 10% stake in the company in August, and Intel received $5.7 billion from Uncle Sam in Q3 alone. That’s not investment advice, that’s industrial policy in action. Then in September, Nvidia—yeah, that Nvidia, Intel’s biggest rival in the AI chip space, invested $5 billion. SoftBank threw money at them too. All in all, Intel has secured about $16 billion in new capital this year. That’s the kind of financial backing that buys you time to execute your turnaround plan.

The Trump administration has been pretty vocal about wanting to restore semiconductor manufacturing to the U.S., and Intel is basically the vehicle for making that happen. Whether that’s good business or good politics is a debate for another day, but it definitely explains why the stock has been on fire.

Looking Ahead: Reasons for Caution 

Before everyone rushes to declare Intel’s turnaround complete, let’s pump the brakes a bit. There is some ugly. The Q4 guidance was lukewarm. They’re forecasting revenue between $12.8 billion and $13.8 billion, with earnings of $0.08 per share. That’s down sequentially, which suggests Q3 might have been a bit of a high point. The company also just sold off a majority stake in Altera, their FPGA business, which tells you they’re still scrambling for cash to shore up the balance sheet.

They’ve cut their workforce from 124,000 to about 88,000 employees in just over a year—that’s not restructuring, that’s a bloodbath. Despite all the hype around the foundry business, they still haven’t secured a flagship client that would validate their current strategy. Microsoft rumors are great, but until there’s an actual contract, it’s all just speculation.

The Bottom Line 

Intel’s Q3 2025 earnings were legitimately better than expected, and the stock market’s reaction after-hours reflects that(See chart above). But let’s be clear about what we’re looking at: Intel is a company in the early stages of what CEO Lip-Bu Tan himself says will be a “multi-year turnaround.” They’re not competing with Nvidia for AI dominance. They’re not stealing massive market share from AMD. They’re trying to stabilize the ship, improving margins, and betting big on a foundry strategy that won’t pay off until 2026 at the earliest. That 87% stock gain this year? A lot of that is about geopolitics, federal government backing, and hope rather than current business fundamentals. Still, in my opinion, if you’re an Intel investor—or thinking about becoming one—there’s actually a case to be made here. The PC business is stable and profitable. Data center margins are improving. The foundry might actually land some real customers. The biggest key? The U.S. government is determined to make sure Intel doesn’t fail. The Trump Administration does not want to rely on Taiwan for chip manufacturing. It’s a national security risk with Taiwan’s close proximity to China. Too risky. Whether this government push for Intel adds up to long-term success or just delays the inevitable is the multi-billion dollar question. But for now, Intel is having a moment. And after years of watching this company stumble, it’s refreshing to see.