Intel Corporation (INTC) | Investment Case

1. Company Snapshot

1.a. Company Description

Intel Corporation engages in the design, manufacture, and sale of computer products and technologies worldwide.The company operates through CCG, DCG, IOTG, Mobileye, NSG, PSG, and All Other segments.It offers platform products, such as central processing units and chipsets, and system-on-chip and multichip packages; and non-platform or adjacent products, including accelerators, boards and systems, connectivity products, graphics, and memory and storage products.

The company also provides high-performance compute solutions for targeted verticals and embedded applications for retail, industrial, and healthcare markets; and solutions for assisted and autonomous driving comprising compute platforms, computer vision and machine learning-based sensing, mapping and localization, driving policy, and active sensors.In addition, it offers workload-optimized platforms and related products for cloud service providers, enterprise and government, and communications service providers.The company serves original equipment manufacturers, original design manufacturers, and cloud service providers.

Intel Corporation has a strategic partnership with MILA to develop and apply advances in artificial intelligence methods for enhancing the search in the space of drugs.The company was incorporated in 1968 and is headquartered in Santa Clara, California.

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1.b. Last Insights on INTC

Breaking News: Intel Corporation recently made several announcements. The company presented at the UBS Global Technology and AI Conference 2025. Additionally, Intel decided to retain its networking and communications unit, NEX, after evaluating strategic options. There were also rumors of a potential deal with Apple to manufacture some of its Mac chips. Analysts are suggesting that it may be time to buy Intel stock. No recent earnings release was mentioned. A recent article suggested buying Intel stock based on hopes of a deal with Apple. No official recommendation was found.

1.c. Company Highlights

Last Price	40.5
Change Percentage	-7.45%
Open	43.26
Previous Close	43.76
Market Cap ( Millions)	178115
Volume	103544668
Year High	44.02
Year Low	17.67
M A 50	37.29
M A 200	26.02

FCF Yield	-4.73%
Dividend Yield	0.00%
ROE	0.20%
Debt / Equity	43.76%
Net Debt / EBIDTA	254.69%
Price To Book	1.72
Price Earnings Ratio	923.32
Price To FCF	-21.16
Price To sales	3.33
EV / EBITDA	15.36

2. Intel's Q3 2025 Earnings: A Strong Beat on Revenue and EPS

Intel Corporation reported a solid Q3 2025 with revenue of $13.7 billion, above guidance, and up 6% sequentially. Non-GAAP gross margin was 40%, and earnings per share was $0.23, driven by higher revenue, stronger gross margins, and cost discipline. The significant beat on EPS, which came in at $0.23 relative to estimates of $0.01781, highlights the company's improving operational efficiency. Operating cash flow was $2.5 billion, with gross CapEx of $3 billion, and positive adjusted free cash flow of $900 million.

Publication Date: Oct -28

                                    📋 Highlights
                                    Revenue Growth & Margins::
                                                Q3 revenue reached $13.7 billion (+6% sequentially), with non-GAAP gross margin at 40% and EPS of $0.23, driven by higher revenue and cost discipline.
Client Segment Expansion::
                                                Client revenue hit $8.5 billion (+8% qoq), fueled by Windows 11 refresh cycles and PC AI revenue rising to $4.1 billion (+5% qoq).
Foundry & AI Momentum::
                                                Intel Foundry faced $2.3 billion operating loss but advanced 18A/14A nodes, while data center AI demand surged for Xeon 6 processors (up to 68% TCO savings).
Cash Flow & Funding::
                                                Operating cash flow was $2.5 billion, with $20 billion in secured cash including $5.7 billion from the U.S. government and $2 billion from SoftBank.
Q4 Outlook & Strategic Moves::
                                                Revenue forecast at $12.8-13.8 billion, 36.5% gross margin expected, and $5 billion NVIDIA Foundry investment anticipated by Q4 2025 closure.

                                

Segment Performance and Growth Drivers

The client segment revenue was $8.5 billion, up 8% quarter-over-quarter, driven by a seasonally stronger TAM, Windows 11-driven refresh, and a stronger pricing mix. PC AI revenue was $4.1 billion, up 5% sequentially, driven by improved product mix and higher enterprise demand. In data center, AI workloads are driving growth, with a significant increase in demand for Xeon 6 processors, which offer up to 68% TCO savings and up to 80% less power compared to the average server installed today. As David Zinsner noted, "AI demand is driving growth, but we need to participate in making applications for AI in the PC space."

Foundry Business and Progress on 18A and 14A

Intel Foundry delivered revenue of $4.2 billion, down 4% sequentially, and an operating loss of $2.3 billion. Despite this, the company is making progress on Intel 18A and Intel 14A, and is advancing its advanced packaging deal pipeline. Lip-Bu Tan mentioned that the company has made progress on 18A and 14A, with improving yields and customer engagement, and is focused on securing commitments before making investments.

Valuation and Future Outlook

With a P/E Ratio of 901.43 and an EV/EBITDA of 19.14, Intel's valuation suggests that the market is pricing in significant growth expectations. The company's forecast for Q4 revenue of $12.8-13.8 billion and EPS of $0.08 on a non-GAAP basis indicates a cautious optimism. Analysts estimate next year's revenue growth at 2.4%, which may not be sufficient to justify the current valuation. The company's efforts to improve gross margins, advance its foundry business, and drive growth in AI PC and data center segments will be crucial in meeting these expectations.

Gross Margin Trajectory and Cost Structure

Intel's gross margin is currently under pressure due to high costs of older processes like Intel 10 and 7, and low yields on 18A. Zinsner suggests that if the company were to move off these older processes and onto 18A, gross margins would improve significantly. The company expects gross margins to improve on the foundry side as it scales and moves to more leading-edge mix.

3. NewsRoom

S&P 500 Gains and Losses Today: Dollar General Soars on Strong Earnings; Intel Stock Slumps

Dec -04

Source: investopedia.com

Nvidia Faces Challenge of Deploying Rapidly Growing Cash Pile

Dec -04

Source: gurufocus.com

Intel to retain networking unit NEX following strategic review

Dec -04

Source: proactiveinvestors.com

Intel Stock Surged 10% on Apple Chip Manufacturing Hopes—Time to Buy?

Dec -04

Source: 247wallst.com

Could This AI Chipmaker Be the Market's Next Trillion-Dollar Contender?

Dec -04

Source: fool.com

Intel Keeps Networking Unit After Strategic Review

Dec -04

Source: gurufocus.com

Intel to retain networking unit NEX following strategic review

Dec -04

Source: proactiveinvestors.com

Intel Ditches Sale Talks And Reinvents Networking Business Inside Its AI Strategy

Dec -04

Source: feeds.benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.42%)

6. Segments

Client Computing Group (CCG)

Expected Growth: 7.5%

Increasing demand for high-performance computing, artificial intelligence, and IoT devices drive growth in Client Computing Group’s CPU, chipset, and motherboard sales.

Intel Foundry Services

Expected Growth: 12.5%

Intel Foundry Services' customized semiconductor manufacturing services will drive growth, fueled by increasing demand for advanced chips and Intel's commitment to capacity expansion and technology advancements.

Data Center and AI

Expected Growth: 20.0%

Growing demand for AI, autonomous driving, and emerging technologies drive Intel's Data Center and AI segment growth, fueled by increasing adoption in industries such as healthcare, finance, and retail.

Network and Edge

Expected Growth: 14.2%

Intel's Network and Edge segment is poised for growth driven by increasing demand for 5G infrastructure, edge computing, and artificial intelligence, as well as the company's strategic investments in these areas.

All Other

Expected Growth: 4.3%

Increasing demand for Internet of Things, autonomous driving, and artificial intelligence solutions drive growth in Intel's All Other segment, which includes non-reportable operating segments.

Intersegment eliminations

Expected Growth: 5.2%

Intel's elimination of intersegment revenue and expense transactions enhances transparency, enabling better resource allocation and driving growth, fueled by increasing demand for cloud computing, artificial intelligence, and 5G networks.

7. Detailed Products

Central Processing Units (CPUs)

Microprocessors that execute most instructions that a computer program requires, controlling the other components of the system.

Motherboards

Main circuit boards that connect and support various components of a computer system.

Memory and Storage

Products that provide temporary or permanent data storage, including DRAM, NAND flash, and Optane memory.

Internet of Things (IoT) Devices

Specialized computing systems for various applications, such as industrial automation, retail, and transportation.

Artificial Intelligence (AI) and Deep Learning

Hardware and software solutions for machine learning, computer vision, and natural language processing.

5G Modems

Modems that enable high-speed, low-latency wireless connectivity for mobile devices and IoT applications.

FPGA (Field-Programmable Gate Array) Chips

Programmable integrated circuits for custom computing, data center acceleration, and edge computing.

Ethernet Controllers and Adapters

Components that enable high-speed networking and connectivity in data centers, servers, and IoT devices.

8. Intel Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Intel's products are highly specialized and customized, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative products, Intel's strong brand and high-quality products limit their negotiating power.

Bargaining Power Of Suppliers

Intel has a diverse supplier base, and its large scale of operations gives it significant bargaining power over its suppliers.

Threat Of New Entrants

The high barriers to entry in the semiconductor industry, including significant capital expenditures and technological expertise, make it difficult for new entrants to compete with Intel.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with Intel facing intense rivalry from companies like AMD, NVIDIA, and Qualcomm.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	31.82%
Debt Cost	3.95%
Equity Weight	68.18%
Equity Cost	9.40%
WACC	7.66%
Leverage	46.67%

11. Quality Control: Intel Corporation passed 2 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Analog Devices

A-Score: 4.8/10

Value: 1.1

Growth: 4.6

Quality: 7.3

Yield: 4.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

GLOBALFOUNDRIES

A-Score: 3.7/10

Value: 5.4

Growth: 5.0

Quality: 4.2

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

AMD

A-Score: 3.6/10

Value: 0.2

Growth: 6.8

Quality: 6.6

Yield: 0.0

Momentum: 5.0

Volatility: 3.0

1-Year Total Return ->

Intel

A-Score: 3.5/10

Value: 4.1

Growth: 1.2

Quality: 3.2

Yield: 1.0

Momentum: 9.0

Volatility: 2.7

1-Year Total Return ->

ON Semiconductor

A-Score: 3.3/10

Value: 2.8

Growth: 6.9

Quality: 5.7

Yield: 0.0

Momentum: 1.5

Volatility: 3.0

1-Year Total Return ->

Marvell Technology

A-Score: 3.3/10

Value: 2.7

Growth: 4.3

Quality: 4.2

Yield: 0.0

Momentum: 6.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

25.72%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.66%

Intel Corporation - US4581401001

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on INTC

1.c. Company Highlights

Lower Growth

Higher Yield

Medium Volatility

Earnings Beats

Average Quality

Earnings Miss

Weak Momentum

Revenues Beats

Lower Quality

Cheaper

Average Yield

Stable Momentum

Fairly Valued

Strong Momentum

2. Intel's Q3 2025 Earnings: A Strong Beat on Revenue and EPS

Segment Performance and Growth Drivers

Foundry Business and Progress on 18A and 14A

Valuation and Future Outlook

Gross Margin Trajectory and Cost Structure

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (13.42%)

6. Segments

Client Computing Group (CCG)

Expected Growth: 7.5%

Intel Foundry Services

Expected Growth: 12.5%

Data Center and AI

Expected Growth: 20.0%

Network and Edge

Expected Growth: 14.2%

All Other

Expected Growth: 4.3%

Intersegment eliminations

Expected Growth: 5.2%

7. Detailed Products

Central Processing Units (CPUs)

Motherboards

Memory and Storage

Internet of Things (IoT) Devices

Artificial Intelligence (AI) and Deep Learning

5G Modems

FPGA (Field-Programmable Gate Array) Chips

Ethernet Controllers and Adapters

8. Intel Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Intel Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

12.e Scoring ^Insights

12.f DCF ^BETA