Intel’s Q3 earnings report is set to be released on October 23. The earnings report will have a significant impact on the stock, as it will reveal the extent to which the company has managed to stabilize its losses.
The company reported stagnant revenue in Q2 of $12.9 billion year over year, but more importantly, it reported a net loss of $2.9 billion. Intel’s most significant problem is its fabs, which are losing money, with more than $13 billion in losses in the last four quarters alone.
The company is betting that its new Panther Lake series of CPUs, which will start selling in January, will enable a turnaround.
Intel’s testing indicates that we can expect more than 50% better CPU and GPU performance, as well as more than 40% lower power usage, at a similar single-threaded performance compared to Lunar Lake or Arrow Lake-H.
One reason, if not the primary one, for these performance and power-efficiency gains is Intel’s use of its 18A manufacturing process (node) for making the chips. Intel is hoping the success of Panther Lake chips will attract customers to its fabs.
Cash infusions into Intel aren’t enough
Intel’s (INTC) stock gained 102% in value over the last six months.
These gains are due to the company securing investments, beginning with SoftBank’s $2 billion stake. The U.S. government plans to speed up the payment of $8.9 billion in funding already pledged to the company, and Nvidia will invest $5 billion.
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A couple of rumored deals boosted the stock. Whispers suggested that Intel is attempting to make a deal with Apple and AMD to use its fabs.
Another quite absurd and refuted rumor claimed Intel was trying to make a deal with Taiwan Semiconductor Manufacturing Company (TSMC) to invest in it.
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If Intel could convince AMD or Apple to use its fabs, that might save the company, but it hasn’t happened yet. Intel hasn’t yet disclosed the yields on its 18A node, and that might be the factor.
The situation might be changing for the better, as SemiAccurate reported that Intel Foundries will manufacture Microsoft’s Maia 3 chip codenamed “Griffin” using the 18A or 18A-P process, according to TechPowerUp.
Bernstein analyst updates outlook on Intel stock before earnings
Stacy Rasgon said Intel will face important challenges heading into 2026.
He noted that Intel raised approximately $16 billion in cash, strengthening its balance sheet. This, however, led to share dilution and an increasing dependence on one-time deals.
Rasgon thinks Intel’s problems haven’t changed; it is still losing market share in both client and server chips, and its manufacturing strategy is unclear.
According to him, Wall Street’s forecasts for next year are too high, as many analysts haven’t accounted for the impact of Intel’s Altera divestiture, which could lower quarterly revenue by approximately $1.6 billion, as reported by TipRanks.
Rasgon commented on Intel stock gains, writing: “The real bull case right now seems to be that Trump wants the stock to go up.”
He reiterated a market perform rating with a price target of $21. With this target, a hold rating seems odd, as the current stock price is about $38.
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Bank of America analyst Vivek Arya and his team recently expressed a different opinion. The team said: “Even if Intel Foundry maintains its internal customer AND potentially lands substantial external customer revenue [in the range of $5 billion to $10 billion], we estimate the foundry to remain unprofitable on both gross-profit and operating-profit bases by [calendar year 2027 estimates].”
Arya downgraded the stock from neutral to underperform, with a target price of $34, based on 3.3 multiple of his enterprise value to sales ratio estimate for 2026, in line with the historical range of 1.7 to 4.
They noted downside risks:
- Lower than yield/ramp at Intel Foundry, particularly for its new 18A and upcoming 14A nodes
- Lack of material external foundry customer in wafer processing
- Weaker-than-expected trends in a mature PC market
- Accelerated share loss to major CPU competitors
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