Intel Misplaced Cash Once more in 2025. Here is Why - and What It Means for the Inventory

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Intel (NASDAQ: INTC) was one of many comeback tales of 2025, with the tech big’s shares almost doubling. But even after that vast rebound, Intel has nonetheless been a disappointment to long-term shareholders. Much more worrisome is the truth that even with the large bounce in its share value, Intel nonetheless noticed its enterprise lose cash in 2025.

The inventory market anticipates future information somewhat than getting mired previously, and so Intel inventory‘s robust efficiency clearly means that the enterprise will fare higher sooner or later than it has lately. However, it is nonetheless value previous outcomes to see how Intel obtained itself into its present scenario and what it may take to maneuver ahead. That is the first objective of this second article within the Voyager Portfolio collection on Intel.

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Row of computing equipment in a data center. — Picture supply: Getty Photos.

Intel posted its peak gross sales yr in 2021, with income topping out at $79 billion. Nevertheless , even at that time, there have been some indicators that the chipmaker’s enterprise wasn’t solely wholesome. Rising prices of products bought had already pulled gross margin down 3 proportion factors over the earlier two years to 55.5%, and rising analysis and growth bills had dealt a 6 proportion level hit to Intel’s working margin, to 24.6%.

After that, issues turned ugly rapidly. 2022 was a tricky yr within the tech business, with the bear market in shares largely reflecting weaker client demand because of excessive inflation and macroeconomic pressures. Income plunged 20%, and internet revenue took an almost 40% hit. Intel had benefited from excessive demand for PCs early within the COVID-19 pandemic, however as circumstances began returning to regular, bloated PC inventories took their toll on Intel’s enterprise.

The pullback continued in 2023, with internet revenue taking an almost 80% haircut and gross sales falling one other 14%. Along with weak demand, Intel continued to lose market share to semiconductor inventory rivals like Nvidia (NASDAQ: NVDA) and Superior Micro Gadgets (NASDAQ: AMD), each of which had been far more aggressive in pursuing AI-related alternatives.

2024 proved to be the final hurrah for former CEO Pat Gelsinger. Within the third quarter , the monetary axe fell, as Intel took $15.9 billion in impairment prices and $2.8 billion in restructuring prices. Regardless of efforts to comply with by on a plan to chop prices by $10 billion, Intel’s poor efficiency in its PC and foundry divisions offset indicators of energy in its smaller knowledge middle and AI section. Solely a month later, the Intel board compelled Gelsinger’s resignation.

After a short interim interval, Intel named Lip-Bu Tan as CEO in March 2025. Tan’s earlier expertise in know-how management prompted the transfer, significantly as a result of he had served as a director on Intel’s board between 2022 and 2024.

Sadly, the restoration from Intel hasn’t but totally taken form. 2025 gross margin rose greater than 2 proportion factors to 34.8%, and spending on R&D and normal overhead bills was down 17%. But the corporate nonetheless posted a GAAP lack of round $300 million, or $0.06 per share. Income for the yr was flat, with the PC section once more offsetting good points in knowledge middle and AI gross sales.

Nonetheless, there have been some constructive indicators. On an adjusted foundation, Intel had constructive earnings of $0.42 per share. Working money movement of $9.7 billion confirmed that Intel’s enterprise can nonetheless generate capital.

Tan believes that central processing models (CPUs) will nonetheless play a necessary function within the AI period. That is a distinction to the technique that Nvidia and AMD have adopted, with their emphasis on graphics processing models (GPUs) as the muse for his or her AI chips.

Whether or not Tan is correct will make all of the distinction as as to if Intel could make good on its rebound hopes. The third and closing article of this collection for the Voyager Portfolio will look extra intently at Intel’s strategic plan and what it’s going to take to make it profitable.

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Dan Caplinger has positions in Nvidia. The Motley Idiot has positions in and recommends Superior Micro Gadgets, Intel, and Nvidia. The Motley Idiot has a disclosure coverage.

Intel Misplaced Cash Once more in 2025. Here is Why — and What It Means for the Inventory was initially revealed by The Motley Idiot

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