Intel Faces Q3 Earnings Test Amid $18B U.S., Nvidia, SoftBank Investment Surge

Intel's recent earnings and stock performance reflect a complex turnaround driven by significant capital injections from the U.S. government, Nvidia, and SoftBank, totaling over $16 billion, which have bolstered its balance sheet and fueled AI and manufacturing initiatives. Despite these investments and a share price rally of over 80% year-to-date, Wall Street remains cautious about Intel's long-term profitability and sustainability, particularly due to ongoing struggles in its foundry business and reliance on older chip technologies like Intel 7 and Intel 10. Analysts note supply constraints on these older nodes, which are currently in high demand, but question the company's ability to transition customers to newer products, potentially risking market share. The foundry segment, critical for Intel's future, continues to post significant losses and has yet to secure substantial external customer commitments, raising concerns about its viability. CEO Lip-Bu Tan faces a critical test in restoring confidence by demonstrating that cost-cutting, strategic divestments, and new partnerships can translate into real profit gains amid geopolitical pressures and intense competition from global leaders like TSMC. Overall, Intel's situation is seen as more event-driven than earnings-driven, with the market closely watching upcoming guidance and the company's ability to navigate supply chain and competitive challenges.