With an Intel recovery underway, all eyes turn to its foundry business

Summary

Intel’s third-quarter earnings beat Wall Street expectations Thursday, results buoyed by a bump in revenue combined with larger cuts, and multiple, sizable investments over the last two months as CEO Lip-Bu Tan looks to turn around the struggling semiconductor giant. Intel’s revenue results and its $4.1 billion in net income provides a far rosier view than its string of quarterly losses. But the company’s recovery story deserves several chapters dedicated to cost cutting via layoffs and other reductions as well as a series of high-profile investments from Softbank, Nvidia, and the U.S. government. Intel added $20 billion to its balance sheet during the third quarter, the company announced on its third-quarter earnings presentation on Thursday, sending its stock soaring. This growth was largely due to three sizable investments in the company over the last three months. In August, SoftBank invested $2 billion. A few days later, the U.S. Government took an unprecedented 10% equity stake in Intel. The company has received $5.7 billion of the planned $8.9 billion from the U.S. Government thus far. Nvidia also bought a $5 billion stake in Intel in September as part of a broader deal to develop chips together over time. “The actions we took to strengthen the balance sheet give us greater operational flexibility and position us well to continue to execute our strategy with confidence,” Tan said on the company’s earnings call. “In particular, I’m honored by the trust and confidence President Trump and Secretary [Howard] Lutnick have placed in me. Their support highlights Intel’s strategic role as the only U.S.-based semiconductor company with leading edge logic, [research and development] and manufacturing.” The company also received $5.2 billion from closing the sale of its ownership stake of Altera, a hardware company it had owned since 2015, on September 12. It also sold its stake in Mobileye, an autonomous driving tech company. Intel grew its quarterly revenue by $800 mi...