Is this the end of the tunnel, or just a temporary upturn? In the last few hours, Intel has reported a profitable quarter with net income of $4.1 billion, its first in 18 months. The main lesson to be learned from this rebound is that Intel owes its return to form to its historical business: PC chips. Sales exceeded forecasts, up 3% to $13.7 billion, including $8.5 billion in PCs and $4.1 billion in data centers. At the same time, despite several positive signs, the Intel Foundry business still posted a $2.3 billion loss for the quarter.
Intel’s first profit in 18 months: the start of a cycle?
While the sales growth is a welcome surprise, make no mistake: the return to profit is largely due to the drastic slimming cure the company has imposed on itself. Thus, in the space of a year, gross profit margin from 15% in the third quarter of 2024 to almost 38% this quarter. Given the limited evolution of the product catalog, this result is clearly due to the reduction in overheads. But the rebound in PC activities could continue to accompany Intel in the coming months. Intel CFO Dave Zinsner explains that current demand is outstripping supply, a trend that the blueprints predict will continue into 2026. In the coming months, Intel’s offering is also set to expand with some exciting products on paper (Panther Lake, Nova Lake, the deal with Nvidia…). Last but not least, in the field of AI, Intel seems to have found a way with cards offering a sharp performance/price ratio.
All that’s missing in this picture is a major customer for the foundry business to confirm this positive momentum… Nothing can be ruled out in the coming weeks. On this subject, the situation has changed considerably with the Trump administration’s announcement of a public acquisition of a 10% stake in Intel. Without adding any new money beyond what had been planned, the government simply transformed the aid announced by the Biden administration in order to obtain a share in the company. The deal with Nvidia reinforced this dynamic. This signal was positively received by industry players, who were sceptical about Intel due to its weakened financial situation.
