Intel revenue beats expectations in Q2 2025, but a bleeding bottom line undercuts the win
A struggling foundry business, restructuring charges and write-downs wiped out Intel's bottom line.
The chip industry is enjoying a good run as AI fuels demand across the board, but Intel just can’t seem to find its rhythm, and second-quarter results delivered a confusing blend of progress and pain.
Revenue came in at $12.86 billion, flat compared to last year but well above Wall Street’s forecast. That alone might have reassured investors until you look at the bottom line.
Despite the sales beat, Intel reported a loss of $0.10 per share. Analysts were expecting a modest profit. The company blamed restructuring and impairment charges, which totalled $2.9 billion. That included an $800 million write-down tied to obsolete manufacturing tools and another $200 million in one-time costs.
All of these amid a cost-cutting overhaul
Behind the earnings miss is a company in the middle of major surgery. CEO Lip-Bu Tan, just a few months into the job, is pushing through deep cuts. Intel is laying off 15–20% of its workforce and expects to finish the year with around 75,000 employees. It’s cancelling projects in Germany and Poland and slowing construction in Ohio. The focus is now on cleaning up bloated operations and finding a more disciplined path forward.
Emmanuel Oyedeji
An optimistic forecast
Still, Intel offered something rare: a surprisingly optimistic forecast. It expects third-quarter revenue to land between $12.6 and $13.6 billion. At the midpoint, that’s ahead of what analysts had pencilled in. Investors noticed. The stock popped 4% in after-hours trading, partially recovering from a sharp drop earlier in the day.
Not all of the results were bleak. Inventory levels improved, with days of outstanding inventory dropping to 111 from 142 last quarter. That’s a good sign. The Core Products division, which includes PC and data centre chips, brought in $11.8 billion in sales, also beating expectations.
Intel's foundry business, meant to challenge TSMC, posted just $4.4 billion in revenue, a mere 2% increase despite massive investment. Amidst all this, the broader financial picture is still in the red. Operating margins fell to negative 24.7%. Free cash flow was down more than $9 billion compared to the same period last year.
A look at the mounting competition
Meanwhile, competition is heating up. AMD continues to gain share. Qualcomm is moving into the PC space. Nvidia, now worth over $4 trillion, is dominating the AI chip market that Intel is still trying to break into. The gap between Intel and its rivals has never been more stark. Its market cap stands at around $102.5 billion. AMD is more than double that, while Nvidia is in another universe entirely.
Intel’s problems are real, but this quarter shows it’s not standing still. The company is trimming costs, pushing for supply change, and trying to reset expectations. Whether this transition leads to a comeback or exposes deeper cracks is still unclear. For now, Intel is showing just enough progress to keep hope
