Intel has made a financial turnaround, reporting significant profit and revenue growth, boosted by expectations of increasing AI demand to drive its foundry and datacenter CPU businesses.

In its Q3 2025 earnings, Intel announced revenues of $13.7 billion, a 3% year-over-year increase, along with a net income of $4.1 billion, recovering from the previous quarter’s $2.9 billion loss. However, the company saw a 1% decline in datacenter product revenues and a 4% drop in its foundry business revenue.

Consumer products led the charge with $8.5 billion in revenue, up by 5%. This growth is attributed to increased desktop market activity following Windows 11 upgrades, as users require new hardware following the end of Windows 10 support.

Though AI hardware is experiencing rapid growth, Intel faces stiff competition from Nvidia and AMD in the GPU market. Intel’s foundry business also struggles to compete with TSMC’s advanced manufacturing capabilities. Nevertheless, Intel’s executives assure investors of progress in developing its cutting-edge 18A process.

CFO David Zinsner noted that while significant capacity enhancement for the 18A process is not imminent, Intel is preparing to ramp up its foundry capabilities toward the decade’s end. Meanwhile, Intel is focusing on establishing customer confidence in its upcoming processes.

CEO Lip Bu Tan confirmed advancements in operationalizing Fab 52 in Arizona for 18A process manufacturing, highlighting efforts to meet AI hardware demands.

Analysts anticipate a surge in AI applications, benefiting players like Intel in the server CPU market, as AI infrastructure expansion is expected to drive server CPU demand.

Despite reported improvements, Intel acknowledges supply chain challenges with existing Intel 7 and Intel 10 processes, limiting its current production abilities.

Investors responded positively to Intel’s forward-looking statements, causing a surge in its share price post-announcement.

Overall, Intel’s strategic focus on AI and foundry services aims to revitalize growth in its core CPU markets, while addressing current operational challenges.