Intel earnings report for the second quarter is out, and while the company beat revenue expectations with $12.8 billion in sales, the market didn’t react kindly. INTC stock dropped nearly 10% after Intel announced a 15% workforce reduction, canceled major chip factory projects, and posted a surprise earnings miss.
This latest Intel earnings report shows the chipmaker’s ongoing struggle to stay competitive in the AI-dominated semiconductor market, where rivals like Nvidia and AMD continue to set the pace.
The report underscores Intel’s ongoing challenges in navigating the rapidly evolving semiconductor landscape, especially amid stiff competition in AI and high-performance computing.
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Intel’s Earnings at a Glance
| Metric | Result | Expectation |
|---|---|---|
| Revenue | $12.8 billion | $11.8 billion |
| Adjusted EPS | -$0.10 | $0.01 |
| Headcount After Layoffs | ~75,000 | N/A |
| INTC Stock Movement | -9.32% | N/A |
| Product Revenue (CPUs, Data, AI) | $11.8 billion | $10.9 billion |
| Foundry Revenue | $4.4 billion | $4.3 billion |
| Forward Revenue Forecast | $12.6B – $13.6B | $12.6B |
Intel Lays Off 15% of Workforce, Cancels Factories in Europe
As part of a major restructuring plan, Intel is cutting 15% of its global workforce, bringing its headcount to around 75,000. At the same time, it has canceled key chip manufacturing projects in Germany and Poland and is slowing construction at its Ohio facility.
These decisions are driven by an urgent need to optimize costs and shift focus toward AI hardware and advanced chip design—areas where rivals like AMD and Nvidia have surged ahead.
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Revenue Beats, But EPS Misses Due to Heavy Charges
Despite delivering strong sales, Intel posted a loss of $0.10 per share, largely due to:
- $800 million in non-cash impairments related to unused tools
- $200 million in one-time restructuring costs
Last year during the same quarter, Intel had reported a small profit on similar revenue, highlighting the impact of current strategic and operational shifts.
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AI Push Continues Despite Delays
Intel’s Foundry business, which builds chips for third-party customers, brought in $4.4 billion, slightly ahead of expectations. However, the unit is still finding its footing compared to competitors.
Intel has signed deals with Microsoft and Amazon to manufacture chips using its next-gen 18A technology, which CEO Pat Gelsinger says will be crucial for future internal and external growth.
The AI chip market is booming, led by Nvidia and AMD, and Intel is racing to stay relevant. Meanwhile, Qualcomm is pushing aggressively into the PC processor market with its Snapdragon X chip line.
Q3 Outlook: A Cautious Optimism
Intel gave a revenue forecast of $12.6 billion to $13.6 billion for the next quarter, slightly above Wall Street expectations. However, with job cuts and factory slowdowns, investor sentiment remains cautious.
For context, such economic shifts are being felt across governments and households alike—from stimulus plans like direct $1,000 payments to evolving social security payment schedules.
Intel vs. Its Competitors
| Company | Market Cap (approx.) |
|---|---|
| Nvidia | $4 trillion |
| AMD | $262 billion |
| Intel | $98 billion |
Intel is still a major player, but it’s clearly being outpaced by Nvidia in AI and AMD in server and consumer CPUs. With foundry ambitions stalled and profit pressure rising, the company needs flawless execution ahead.
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Frequently Asked Questions (FAQs)
Q1. Why did Intel’s stock fall after beating revenue expectations?
Because it missed earnings estimates, announced major layoffs, and canceled international factory projects—causing concern among investors.
Q2. How many jobs is Intel cutting?
Intel is laying off 15% of its workforce, targeting a total of around 75,000 employees globally.
Q3. What happened to Intel’s factory expansion plans?
Intel canceled its projects in Germany and Poland, and slowed construction at its Ohio plant due to cost and strategic concerns.
Q4. Is Intel still investing in AI chips?
Yes. Intel is focusing heavily on 18A technology, AI-specific server chips, and has partnerships with major clients like Microsoft and Amazon.
Q5. What’s next for Intel?
The company plans to streamline operations, invest in high-performance AI chips, and shift focus from mass expansion to strategic execution.
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