So, Intel Beat Earnings: Here's Why You Shouldn't Get Excited

Intel's Earnings Beat Is a Magic Trick, and You're Supposed to Be the Sucker

So, Intel stock price jumped over 3% on Friday. Wall Street popped the cheap champagne, and the finance bros on X, formerly Twitter, declared the great American comeback was on, fueled by reports like Intel stock jumps as Q3 earnings beat expectations, AI drives chip demand - Yahoo Finance. Everyone patted each other on the back for being so damn smart. It’s a cute little scene.

Give me a break.

We’re all supposed to look at the headline numbers—revenue of $13.7 billion beating expectations, earnings per share of $0.23 when the "experts" predicted a measly penny—and pretend this is a healthy company. It feels like looking at a beautifully restored classic car, all gleaming chrome and fresh paint, while deliberately ignoring the fact that the engine is on fire and leaking oil all over the showroom floor.

The fire, of course, is the Intel Foundry Services. This grand project to become the world's chip manufacturer for hire just posted a loss of $2.3 billion. For the quarter. That’s not a typo. They burned through two-point-three-billion-dollars in three months. Sure, it’s an "improvement" over the $5.8 billion they torched last year, but this is the kind of improvement that only an accountant could love. It’s like celebrating because you only got stabbed nine times instead of twenty. You’re still bleeding out, buddy.

A Turnaround Built on Bailouts

Let's be real about where the "cautious optimism" is coming from. It ain't from their core business suddenly figuring out how to print money again. No, this fragile new confidence is built on a foundation of other people's cash.

First, you’ve got Uncle Sam stepping in and taking a 9.9% stake. Then you have Nvidia—Nvidia!—their chief rival in the AI gold rush, tossing in $5 billion for a 4% piece of the company. SoftBank is in on it, too. This isn't a vote of confidence; it's a strategic intervention.

This is like the heavyweight champion of the world giving his washed-up rival a protein shake and a B12 shot before their title fight. Why would Nvidia prop up Intel? Are we supposed to believe it’s out of the goodness of Jensen Huang’s heart? Or is it a calculated move to keep a potential US-based manufacturing option on life support, a hedge against total reliance on foreign fabs? What happens when that strategic need disappears? Does the money tap get turned off? These are the questions nobody on the earnings call wants to answer.

And the government's involvement just makes it all feel... artificial. This isn't a free-market success story. It's a geopolitically essential company being kept afloat because the alternative is unthinkable. They're trying to re-shore the world's most critical manufacturing process, and Intel is the only horse they have in the race. It’s a necessary project, I guess, but don't sell it to me as a brilliant business turnaround. It’s a state-sponsored science project with a stock ticker attached.

The AI Hype Is a Hell of a Drug

You have to hand it to the new CEO, Lip-Bu Tan. He delivered his line perfectly: "AI is accelerating demand for compute and creating attractive opportunities across our portfolio."

Let me translate that for you: "Please, please, please associate us with the AI hype train. Ignore the billions we’re losing in the foundry. Just keep chanting 'AI' and maybe the INTC stock price will keep going up." It’s the magic word of 2024. You could be selling artisanal toothpicks, but if you say you’re using AI to optimize the wood grain, venture capitalists will beat a path to your door.

But the magic wears off when you look at the Q4 guidance. They’re projecting revenue and earnings below what analysts were expecting. Their excuse is that they’re not including revenue from Altera, a firm they partially spun off. Offcourse, that’s the reason. It couldn’t possibly be that the PC market is still shaky and their data center business is in a street fight with AMD and Nvidia.

This guidance is a problem. No, "problem" doesn't cover it—this is a five-alarm buzzkill. After a quarter of supposed triumph, you immediately tell the market that the next three months are going to be a letdown? It fundamentally undermines the entire comeback narrative. It’s like a band playing a killer encore and then announcing their next album will be all polka covers. You just kill the vibe instantly.

Then again, maybe I'm the crazy one here. Maybe losing a couple billion a quarter on a factory is the new definition of success.

It's Still a House of Cards

Look, I get it. We all want an American manufacturing champion. We all want Intel to be the titan it once was. But cheering for this earnings report feels like celebrating a patient whose fever dropped from 105 to 103. They’re still sick. The underlying disease—a massively, absurdly unprofitable foundry venture—is still raging. The company is being propped up by government necessity and competitor strategy, not by organic, sustainable success. Don't let the fancy numbers and AI buzzwords fool you. This isn't a turnaround; it's a high-wire act, and there’s no safety net.