Intel earnings to test foundry pivot amid 27% share slide
Intel’s quarterly report arrives as its shares pull back from a June peak, with investors looking for evidence that supply constraints are easing and its foundry unit is gaining traction.
Intel reports second-quarter earnings after Thursday's closing bell at a pivotal moment for the chipmaker. Its shares have fallen 27% from a record high of nearly $141 on June 22, dragged down by a broader semiconductor retreat rather than company-specific issues.
The decline follows a 280% year-to-date rally to that peak, leaving the stock vulnerable to profit-taking as investors question whether hyperscalers will sustain aggressive artificial intelligence spending. Wall Street expects the company to post $14.42 billion in revenue, a 12% year-over-year increase, and earnings per share of 21 cents, reversing a year-ago loss of 10 cents.
A primary focus for the market will be Intel's ability to navigate ongoing supply constraints. In the first quarter, revenue hit $13.6 billion, but CFO David Zinser noted it would have been "meaningfully higher" if supply had kept pace with demand. That demand is being driven by a shift in AI computing from model training to inference, where advanced systems perform multi-step tasks, elevating the role of Intel's central processing units.
RBC Capital analyst Srini Pajjuri noted these constraints offer a strategic advantage. By prioritizing higher-value server CPUs, Intel can improve its product mix and extract higher prices. "Intel doesn't have to be on par with TSMC to make progress," Pajjuri argued. "As long as they get close to where TSMC is, I think they have a lot of opportunity."
Foundry expansion
Beyond its own processors, investors are tracking the progress of Intel's foundry business, which manufactures chips for external clients. This division sets Intel apart from rivals like Advanced Micro Devices, Nvidia, and Alphabet's Google, all of which rely on Taiwan Semiconductor.
With TSMC at full capacity, Intel is positioning itself as an alternative. "Intel has, as of right now, the most clean room space expansion opportunity sitting before it," said Ben Bajarin, CEO of Creative Strategies. "They can add capacity in their foundries, largely here in the United States, some in Ireland as well, faster than [TSMC] can."
The company recently committed $5.7 billion to expand its Leixlip facility in Ireland to boost Xeon server CPU output. Under CEO Lip-Bu Tan, who took over in March 2025, the foundry also secured a deal to produce next-generation security chips for Fortinet. The division is reportedly pursuing manufacturing contracts with Apple, MediaTek, and Elon Musk's Terafab project, though the Apple agreement remains unconfirmed by the companies.
The U.S. government is currently Intel's largest shareholder. Despite the recent share price pullback, analyst sentiment remains cautious heading into the print: 58% of analysts rate the stock a hold, while 34% rate it a buy.
