Intel’s painful rebirth: Tan’s austerity plan delivers results as big money flows in
Once left behind in AI, the chipmaker finds new support from rivals and the state.
Intel posted stronger-than-expected third-quarter results on Thursday, buoyed by sweeping cost cuts and a wave of high-profile investments that have reshaped the fortunes of one of Silicon Valley’s most storied companies.
The results marked Intel’s first earnings report since announcing multibillion-dollar investments from Nvidia and Japan’s SoftBank, alongside an unprecedented $8.9 billion stake acquired by the U.S. government.
For CEO Lip-Bu Tan, who took over amid a collapse in Intel’s market value last year, the turnaround has been swift and brutal. The company’s headcount is now more than 20 percent smaller than a year ago, and its once-grand manufacturing ambitions have been pared back dramatically. The measures, however painful, appear to be working.
Intel reported adjusted gross margins of 40%, easily surpassing analysts’ expectations of 35.7%, while adjusted profit reached 23 cents per share, well above the 1 cent analysts had forecast, according to LSEG data. The company expects fourth-quarter revenue between $12.8 billion and $13.8 billion, roughly in line with Wall Street estimates.
The quarter also reflected the deep strategic reordering under Tan’s leadership. His predecessor, Pat Gelsinger, had embarked on an ambitious plan to transform Intel into a contract chip manufacturer capable of rivaling Taiwan’s TSMC. The strategy led to Intel’s first annual loss since 1986 and rattled investors who saw ballooning costs with little return.
Tan reversed course, cutting aggressively, divesting non-core assets, and refocusing Intel on profitability. The company has also embraced an unusual coalition of backers to finance its recovery.
Last month, Nvidia disclosed a $5 billion investment in Intel, giving it roughly a 4% stake, an ironic twist, given that the two companies are fierce competitors in artificial intelligence chips. In August, SoftBank added $2 billion, while the U.S. government’s $8.9 billion stake, secured after a tense meeting in Washington following President Donald Trump’s public call for Tan’s resignation, underscored Intel’s strategic importance to America’s technology supply chain.
“Our Q3 results reflect improved execution and steady progress against our strategic priorities,” Tan said in a statement, adding that artificial intelligence was “accelerating demand for compute and creating attractive opportunities” across Intel’s product lines.
CFO David Zinsner said the company had taken “meaningful steps” to strengthen its balance sheet, citing accelerated government funding and external investments that would “increase operational flexibility.” Demand, he said, was now “outpacing supply”, a dynamic Intel expects to continue into 2026.
The market has taken notice. After plunging roughly 60% last year, Intel’s shares have surged nearly 90% so far in 2025, outperforming Nvidia, the very company whose rise once epitomized Intel’s decline.
