Intel’s Q3 Results to Test Impact of Major Investments

Billions in funding from Nvidia, SoftBank and the U.S. government offer lifeline, but challenges remain.

Intel’s third-quarter earnings report is set to reveal whether a series of high-profile investments have begun to stabilize the company’s financial position. Under new CEO Lip-Bu Tan, the chipmaker has attracted funding from Nvidia, SoftBank and the U.S. government, signaling external confidence in its turnaround strategy. Despite these developments, Intel is expected to post a 1% decline in quarterly revenue, totaling $13.14 billion. Investors are watching closely for signs of strategic progress and clarity on the long-term impact of these deals.

Funding Surge and Financial Implications

Recent months have seen Intel secure $5 billion from Nvidia and $2 billion from SoftBank, with the U.S. government acquiring a 10% stake for $8.9 billion. These investments provide critical liquidity following years of margin pressure linked to manufacturing expansion under former CEO Pat Gelsinger. However, limited public details about the agreements have left analysts uncertain about their full implications. The company is projected to report a per-share loss of 22 cents, with adjusted earnings of just 1 cent.

Share dilution from the government deal and pending finalization of Nvidia and SoftBank’s stakes could further impact earnings in the fourth quarter. Analyst Ryuta Makino from Gabelli Funds noted that dilution is a concern, but not the most pressing issue for shareholders. The influx of capital is seen as a necessary step to support Intel’s restructuring efforts. Market participants are eager to understand how these funds will be deployed to address operational weaknesses.

Market Share Challenges and Product Momentum

Intel continues to face competitive pressure in the CPU market, where AMD and Arm-based architectures are gaining ground. Despite this, demand across end-markets is showing signs of recovery, aided by a Windows refresh cycle that has boosted global PC shipments by 8%, according to Gartner. Intel’s PC chip division is expected to grow 11% to $8.12 billion, driven by the ramp-up of its Panther Lake processor built on the new 18A manufacturing node. Initial shipments of the chip are scheduled before the end of 2025.

The 18A node is central to Intel’s contract manufacturing ambitions, which have been scaled back under Tan’s leadership. Manufacturing revenue is forecast to remain flat at $4.37 billion, reflecting cautious optimism. Meanwhile, the data center segment is projected to grow 18% to $3.95 billion, benefiting from increased infrastructure investment. Although Intel has struggled to compete in the AI GPU space, its server CPUs remain relevant in hybrid deployments alongside Nvidia’s graphics processors.

Strategic Outlook and Industry Positioning

Intel is preparing to re-enter the AI chip market with a new data center product expected next year. This move aims to capture a share of the rapidly expanding AI infrastructure segment, where Nvidia currently dominates. Portfolio manager Joe Tigay from Equity Armor Fund believes the market is giving Intel leeway based on expectations tied to new partnerships and product innovation. The company’s ability to deliver on these fronts will be critical in shaping investor sentiment.

While the funding deals are viewed as votes of confidence, they do not resolve Intel’s structural challenges. The company must demonstrate progress in execution, particularly in manufacturing efficiency and competitive positioning. Analysts agree that Intel’s future hinges on its ability to translate capital into sustainable growth. The upcoming earnings report will serve as a key indicator of whether the turnaround is gaining traction.