Intel's Q2 2025 revenue was flat year-over-year, totaling $12.9 billion, but exceeded estimates. The Client Computing Group (CCG) showed a 3% year-over-year decline, while the Data Center and AI (DCAI) segment grew by 4%. The Intel Foundry unit saw a 3% increase in revenue. However, the company is losing market share in key areas like servers and CPUs, indicating a need for stronger competitive strategies.

CEO Lip-Bu Tan is focused on strengthening Intel's core product portfolio and AI roadmap. The company is also taking actions to build a more financially disciplined foundry. However, Intel's foundry strategy hinges on achieving volume commitments and execution on new nodes (18A/14A), with CapEx tied to customer adoption. The company is also scaling back or pausing major factory projects in Germany, Poland, and Costa Rica, consolidating operations in Vietnam and Malaysia instead.

Loop Capital initiated coverage of Intel with a Hold rating and a $25 price target, citing the catch-22 situation for Intel Corp, where Taiwan Semiconductor Manufacturing's (TSM) advanced-node manufacturing is better, and for Intel Products to become more competitive, TSM is the obvious manufacturing partner for Intel Products' future compute tiles. However, if Intel Foundry cannot rely on the volume from Intel Products, the company as a whole will struggle to cover fixed costs. Intel's Q3 revenue consensus is $12.62B, and EPS consensus is $0.04.

One-time impairment and restructuring charges weighed on profitability, with $800 million in tool impairments and $1.9 billion in severance and related costs. Capacity investments outpacing demand were flagged, leading to project cancellations and consolidation. Intel 7 node supply constraints remain a challenge, as does competitive pressure in server CPUs and ARM’s encroachment. Tariff uncertainty and regulatory risks continue to impact visibility on demand and cost structure.

Intel highlighted that 18A has started production of wafers at its Arizona plant, and the first Panther Lake processor SKU remains to track to ship later this year. The Trump Administration's AI Action Plan should spur the development of artificial intelligence infrastructure and indicates an understanding of the semiconductor supply chain, according to analysts. This likely bodes well for semiconductor firms such as Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD).

Intel shares tumbled as the semiconductor firm continues to find its footing in foundry while losing market share to rivals such as AMD (NASDAQ:AMD). Analysts surmised that tariff pull-ins contributed in part to the stronger than expected revenue as Intel CEO Lip-Bu Tan continues to try and turn the company around. J.P. Morgan identifies near-term risks, such as customer pull-in purchases falling off and gross margins continuing to drop below 40%.

The company forecasts Q3 revenue between $12.6 billion and $13.6 billion, with a midpoint gross margin of approximately 36% and breakeven non-GAAP EPS, citing a cautious approach due to recent above-expectation revenue and continued tariff uncertainty. The Trump Administration's AI Action Plan should spur the development of artificial intelligence infrastructure and indicates an understanding of the semiconductor supply chain, according to analysts.

Analysts expressed pressing concerns over foundry strategy, margin headwinds, competitive positioning, and clarity on CapEx. Questions were direct, with some skepticism around execution and the pace of strategic shifts. Management adopted a confident tone in prepared remarks. During Q&A, responses were measured and acknowledged challenges, with Tan stating, “I have a lot more confidence... the culture is changing and you guys are really focused on the yield rather than just the performance.”

A federal judge in California threw out a lawsuit filed by a group of Intel (NASDAQ:INTC) shareholders who accused the company of hiding problems related to its foundry business that once revealed, led to a share price plunge. The company has cancelled or paused major factory projects in Germany, Poland, and Costa Rica, consolidating operations in Vietnam and Malaysia instead.