Intel Rides AI Wave To Strong Q3 Earnings, Chip Demand To Outpace Supply Into 2026
Intel's continued efforts to right the ship are paying off with another strong quarter in the books, with the company reporting $13.7 billion in revenue in Q3. That's a 3% year-over-year gain and enough to beat Wall Street's estimates. According to Intel CEO Lip-Bu Tan, the latest earnings are a direct reflection of "improved execution" as the company makes progress on its strategic priorities, and increased demand for compute products in the AI era.
"AI is accelerating demand for compute and creating attractive opportunities across our portfolio, including our core x86 platforms, new efforts in purpose-built ASICs and accelerators, and foundry services. Intel’s industry-leading CPUs and ecosystem, along with our unique U.S.-based leading-edge logic manufacturing and R&D, position us well to capitalize on these trends over time," Tan said in a statement.
The Q3 results represent Intel's strongest third-quarter earnings since 2023. It also signals a return a profitability, with Intel going from a $16.6 billion loss in the third quarter of 2024 to a $4.1 billion operating profit in the third quarter of 2025. The caveat there is that it largely came from non-recurring gains, which are one-off anomalies that exist outside of a company's normal business dealings. Still, Intel is in the black after slipping into the red in Q2.
Going by individual segment, the results were a little more mixed. Intel's Client and Computing Group (CCG) saw a 5% year-over-year gain to $8.5 billion in the third quarter, while its Data Center and AI (DCAI) slipped 1% to $4.1 billion. Intel Foundry also saw some minor slippage, dropping 2% year-over-year to $4.2 billion. Even so, total product revenue increased 3% to $12.7 billion, while all other combined segments rose 3% to $1 billion.
"We took meaningful steps this quarter to strengthen our balance sheet, including accelerated funding from the U.S. Government and investments by NVIDIA and SoftBank Group that increase our operational flexibility and demonstrate the critical role we play in the ecosystem," said David Zinsner, Intel CFO. "Our stronger than expected Q3 results mark our fourth consecutive quarter of improved execution and reflect the underlying strength of our core markets. Current demand is outpacing supply, a trend we expect will persist into 2026."
Going forward, the challenge for Intel will be in continuing to execute on its turnaround efforts, a big part of which includes its foundry business. During an earnings call to discuss the results, Tan said we are "still in the early stages of the AI revolution," and expressed confidence that Intel "can and will play a much more significant role."
His confidence is echoed in multiple recent high profile investments. As Zinsner touched on, SoftBank, which owns a majority stake in Arm, announced a $2 billion investment into Intel in August.
Not to be outdone, NVIDIA in September announced a $5 billion investment in Intel as well as a multi-year partnership to co-develop data center and PC chips. And of course there is the $8.9 billion deal with the U.S. government to boost domestic chip manufacturing. There's also been chatter that Intel could score AMD as a foundry customer, though nothing has been announced.
Tan also said that Intel continues to make steady progress on 18A and that it remains on track to bring Panther Lake products to market this year.
"Intel 18A yields are progressing at a
predictable rate, and Fab 52 in Arizona, which is dedicated to high-volume manufacturing, is now
fully operational. In addition, we are advancing our work on Intel 18A-P and we continue to hit our
PDK milestones," Tan said while discussing Intel's latest earnings report.
Looking ahead, Intel expects its fourth quarter revenue to fall between $12.8 billion to $13.8 billion.
