Intel’s second-quarter earnings report is out, and while the chipmaker beat revenue expectations with $12.8 billion in sales, INTC stock fell nearly 10%. The decline comes after Intel announced a 15% workforce reduction, canceled major chip factory projects in Europe, and reported an unexpected earnings miss.
This report highlights Intel’s ongoing challenges in the AI chip market, where competitors like Nvidia and AMD continue to set the pace.
Intel Earnings at a Glance
| Metric | Result | Expectation |
|---|---|---|
| Revenue | $12.8B | $11.8B |
| 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) | $11.8B | $10.9B |
| Foundry Revenue | $4.4B | $4.3B |
| Forward Revenue Forecast | $12.6B–$13.6B | $12.6B |
Major Layoffs and Factory Cancellations
As part of a global restructuring, Intel is cutting 15% of its workforce, reducing headcount to around 75,000 employees. The company also canceled key chip manufacturing projects in Germany and Poland while slowing construction at its Ohio facility.
These moves are aimed at optimizing costs and focusing on AI hardware and high-performance chips, areas where competitors like AMD and Nvidia have surged ahead.
Revenue Beats, But EPS Misses
Despite beating revenue expectations, Intel posted a loss of $0.10 per share due to:
- $800 million in non-cash impairments from unused tools
- $200 million in one-time restructuring charges
This reflects the costs associated with Intel’s strategic pivot and operational changes.
Intel’s AI Focus Continues
Intel’s foundry business generated $4.4 billion in revenue, slightly above expectations. The company is collaborating with Microsoft and Amazon to manufacture chips using next-gen 18A technology, which CEO Pat Gelsinger says is critical for future growth.
The AI chip market remains dominated by Nvidia and AMD, and Intel is racing to stay competitive with advanced AI server chips and high-performance computing solutions.
Q3 Outlook
Intel projects revenue between $12.6 billion and $13.6 billion for the next quarter, slightly above analyst estimates. However, the combination of job cuts and factory slowdowns keeps investor sentiment cautious.
Intel vs Competitors
| Company | Market Cap |
|---|---|
| Nvidia | $4T |
| AMD | $262B |
| Intel | $98B |
Intel remains a major player in semiconductors but is being outpaced in AI and server CPU markets. Successful execution of its AI-focused strategy is crucial for regaining market momentum.
Frequently Asked Questions (FAQs)
Q1. Why did INTC stock fall after beating revenue expectations?
A: Intel missed earnings estimates, announced major layoffs, and canceled international factory projects, raising investor concerns.
Q2. How many jobs is Intel cutting?
A: 15% of Intel’s workforce, approximately 75,000 employees globally.
Q3. What happened to Intel’s factory expansion plans?
A: Intel canceled projects in Germany and Poland and slowed construction in Ohio due to strategic and cost considerations.
Q4. Is Intel still investing in AI chips?
A: Yes. Intel is focusing on 18A technology and AI server chips, with partnerships with Microsoft and Amazon.
Q5. What’s next for Intel?
A: Streamlining operations, investing in high-performance AI chips, and focusing on strategic execution over mass expansion.perations, invest in high-performance AI chips, and shift focus from mass expansion to strategic execution.
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