Intel beats sales forecasts as new boss sharpens turnaround plan

Intel has delivered a positive surprise for investors, surpassing Wall Street’s sales forecasts in its latest quarterly update. The chipmaker, headquartered in Santa Clara, California, posted revenues for the second quarter of $12.9 billion. This matches the same period a year ago but came in ahead of analyst estimates of $11.9 billion. Intel has also issued a bullish forecast for the third quarter, with revenues expected between $12.6 billion and $13.6 billion, well above consensus expectations.

Rising demand from the personal computer sector has been a key factor in Intel’s improved performance. This demand has been, in part, stimulated by tariff policies from President Trump’s administration. Despite this tailwind, Intel has struggled to establish itself in the rapidly growing artificial intelligence market, where rivals such as Nvidia continue to dominate.

The company’s net loss for the quarter widened to $2.9 billion, up from $1.6 billion during the same period last year. Cost cuts have become a central plank of Intel’s response. New chief executive Lip-Bu Tan, who took the helm in March, has set the ambitious target of reducing headcount to 75,000 by year end, down from 99,500 at the end of 2024.

As part of its renewed strategic focus, Intel recently agreed to sell a 51 per cent stake in its Altera programmable chip division for $4.5 billion. Attention has now shifted to developing a new chipmaking process dubbed 14A, targeting major external clients. This marks a departure from the 18A technology heavily backed by Tan’s predecessor, Pat Gelsinger.

Founded in 1968, Intel was long considered America’s preeminent chip manufacturer but has lost ground to competitors in the all-important race for dominance in AI. Tan has emphasised the importance of strengthening the core product line and refining the company’s AI strategy to meet the evolving demands of customers.

The strength of the earnings report lifted Intel shares by 2.3 per cent to $23.15 in after-hours trading on the New York exchange.