Intel reported US$13.65 billion in Q3 revenue, as PC demand and cost-cutting efforts supported results. The chipmaker has drawn nearly $18 billion in new investments this year from the U.S. government, Nvidia and SoftBank to bolster its comeback in artificial intelligence.
BNN Bloomberg spoke with David Tsui, technology managing director at S&P Global Ratings, about how Intel’s restructuring, foundry efficiency and next-generation chips could shape its recovery and credit outlook through 2026.
Key Takeaways
- Intel’s adjusted profit of 23 cents a share and US$13.65 billion in revenue beat market forecasts for the third quarter.
- Cost-cutting and foundry efficiency efforts are key to Intel’s plan to restore margins and profitability by 2026.
- The company has secured nearly US$18 billion in funding from the U.S. government, Nvidia, SoftBank and asset sales.
- Intel aims to regain market share in AI and data centre chips as the market shifts from training to inference workloads.
- S&P Global Ratings expects Intel’s improved credit metrics and manufacturing recovery to strengthen its financial position.
Read the full transcript below:
MERELLA: As promised, here are the results from Intel, which just released its latest quarterly earnings. Highlights include third-quarter adjusted profit coming in at 23 cents a share, beating the estimate of one cent. Revenue came in at US$13.65 billion, also a beat compared with the estimate of US$13.13 billion. Intel says current demand is outpacing supply, a trend it expects will persist into next year. Here to talk more about those numbers is David Tsui, technology managing director at S&P Global Ratings. David, thanks for joining us today.
DAVID: Thanks for having me.
MERELLA: Clearly, Intel did not disappoint. It was expected to disappoint, but what do you make of the numbers?
DAVID: I actually thought the numbers came in as expected. We did expect the third quarter to be good because of the PC refresh cycle and the approaching end of life for Windows 10. Overall, I’d say it’s within our expectations.
MERELLA: Let’s dig into that a little more. The company is trying to cut costs. Is there any indication from Intel how it’s doing that and whether it’s been successful in the latest quarter?
DAVID: It’s necessary, after a couple of years of disappointment, to right-size its cost base, especially on the foundry side, where it’s been losing a lot of money. There’s a plan in 2026 and 2027 to cut costs. That will include a reduction in force, but more importantly, it’s about improving efficiency in chip manufacturing. We expect what Intel currently outsources to TSMC to gradually come back as its 18A yield ramps up. It’s a big task, but we expect that to happen over the next few years.
MERELLA: The company recently secured about US$18 billion in investment. Is it too soon to see any results from that, and do we know what they plan to do with the money?
DAVID: Right. It isn’t one lump sum, but between the US$5-billion equity investment from Nvidia, the U.S. government funding tied to the CHIPS Act, SoftBank’s investment and the sale of part of Altera, it’s a significant amount of money. Intel can use it to reinvest in its core markets and, more importantly, to catch up in AI. We do expect that even though it’s in a lagging position compared with Nvidia and AMD, as AI broadens from training to inference and edge workloads, Intel will have a place in that market. We expect growth to come over the next few years.
MERELLA: How did Intel fall behind? What happened?
DAVID: Part of it was manufacturing. It’s hard to pinpoint exactly where the momentum was lost, but it’s been years in the making. Design and manufacturing issues led to delays in product launches, and AMD gained significant share, especially in the server and data centre segments. Nvidia also capitalized on the AI boom, marketing its GPUs and CUDA software, which drove broad adoption. Intel didn’t have a competitive product at that time. But the race is far from over. As the AI market shifts from training to inference and moves toward enterprise adoption, that’s where Intel has strength, and we think it will gain some market share.
MERELLA: What gives Intel a stronghold in that next stage?
DAVID: It goes back to its legacy marketplace, where x86 architecture is dominant. That should continue. We think workloads won’t transition as quickly as some expect. There’s an assumption that AI chips and GPUs will take over all computing workloads, but that will take time. Many companies still rely on x86, and that transition will be gradual. That bodes well for Intel. In the meantime, it needs to maintain its leadership in x86, generate cash flow, and invest in AI to close the gap.
MERELLA: What did you make of Intel’s sale of Altera?
DAVID: I think it was strategic. Intel’s core markets are PCs and servers, and Altera is part of its data centre roadmap. They don’t need to own 100 per cent of it. The sale was for 51 per cent, so they can continue designing chips with Altera without owning the entire company. That remains a strategic partnership.
MERELLA: The stock has run up, and investors seem to like what they’ve seen so far. It’s up more than six per cent after hours. Do you think that’s fair value?
DAVID: I’m not an equity analyst, so it’s tough to say, but there’s a lot of debate about whether growth will continue. From what I’ve seen, revenue grew sequentially and margins improved, so it’s in line with expectations — and that’s likely a relief to the market.
MERELLA: All right, David Tsui, we’ll leave it there. Thanks for your time.
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This BNN Bloomberg summary and transcript of the Oct. 23, 2025 interview with David Tsui are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
