Intel's after-hours stock price fell by 5%! Poor first 'report card' after the 'change of leadership'?
On March 12 (local time), Intel (INTC.US) announced that former board member Lip-Bu Tan was appointed as the company's CEO by the board, effective March 18.
Lip-Bu Tan's appointment as CEO was hailed by some investors as Intel finding its "chosen one," and this news also led to a surge in Intel's stock price, indicating the capital market's optimism.
After the U.S. market closed on July 24, Intel released its first "report card" under Lip-Bu Tan's leadership—the Q2 2025 earnings report.
Specifically, in Q2 2025, Intel reported revenue of $12.86 billion, slightly higher than the same period last year and exceeding analysts' expectations of $11.9 billion.
By segment, the Client Computing Group (CCG) revenue was $7.87 billion in Q2, down from $8.14 billion year-over-year but exceeding market expectations; the closely watched Data Center and AI (DCAI) business generated revenue of $3.94 billion, better than the $3.805 billion in the same period last year, with operating profit reaching $630 million, far exceeding the $240 million from the previous year and also surpassing market expectations.
However, while Intel Foundry revenue increased from $4.28 billion to $4.42 billion year-over-year, its operating loss also widened from $2.8 billion to $3.17 billion, significantly impacting overall performance.
On the profit side, Intel's net loss in Q2 reached $3.02 billion, a nearly 83% year-over-year increase, indicating a concerning trend.
For Q3, Intel projected revenue between $12.6 billion and $13.6 billion, with the midpoint above expectations; GAAP gross margin is expected at 34.1%; GAAP EPS attributable to Intel is projected at -$0.24.
Intel CEO Lip-Bu Tan stated: "In recent years, the company overinvested and expanded too quickly while demand was insufficient. As a result, our factory footprint became unnecessarily fragmented and underutilized. No more blank checks. Every investment must be economically justified."
Lip-Bu Tan completely rejected his predecessor's aggressive "build it and they will come" expansion strategy, implementing multiple cost-cutting measures, including canceling factory projects in Germany and Poland, slowing progress in Ohio, and tying future investments in advanced processes like 14A to "confirmed customer orders."
Additionally, Intel plans to reduce its workforce by over 20% from Q2 level by year-end, bringing headcount down to 75,000. The goal is to cut operating expenses to $17 billion by 2025.
Overall, Lip-Bu Tan's first "report card" had some highlights but also left investors with significant concerns.
After hours, Intel's stock fell nearly 5%, reflecting the capital market's sentiment.
Notably, tech stocks like NVIDIA (NVDA.US), Microsoft (MSFT.US), TSMC (TSM.US), and Broadcom (AVGO.US) have surged recently, with NVIDIA surpassing $4 trillion, while Intel's stock remains weak.
Author: Yan Shisi
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