Intel Corporation reported a net loss of $0.19 per share in the first quarter of 2025, highlighting ongoing challenges in its core business despite early signs of growth in its Artificial Intelligence (AI) and foundry segments.
While revenue remained flat year-over-year at $12.7 billion, the company posted a net loss of $821 million, more than double the $381 million loss recorded in the same period last year.
While profit pressures remain, Intel pointed to growth in its AI and foundry divisions as early validation of its ambitious restructuring.
Revenue from its data centre and AI (DCAI) business rose 8 percent to $4.1 billion, and its Intel Foundry segment posted a 7 percent year-over-year increase, reaching $4.7 billion.
Intel’s AI ambitions come as rivals like NVIDIA and AMD dominate the market for AI training chips. While Intel has lagged in this space, the company is now betting on its Xeon 6 and future chip platforms like Panther Lake and Gaudi accelerators to position itself competitively in AI inference and data centre workloads.
Recently, Intel’s Xeon 6 processors with Performance-cores delivered a 1.9x improvement in inference performance over the previous generation, according to MLCommons benchmarks. The company pointed to the gains as evidence of its relevance in a fast-evolving AI landscape.
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Additionally, the upcoming Intel 18A process node is expected to ramp up in the second half of the year, powering Intel’s Panther Lake chip line designed for next-generation AI applications.
“The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth,” said Lip-Bu Tan, Intel’s CEO.
“I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”
Intel’s gross margin declined to 36.9 percent from 41 percent last year, and non-GAAP earnings per share dropped to $0.13, down from $0.18. The company also revised its operating expense forecast downward, aiming to spend $17 billion in 2025 and $16 billion in 2026, which ties to a broader campaign to flatten management layers, accelerate decision-making, and focus resources on its core strengths.
“It was a solid start to the year as we executed well on our priorities,” said David Zinsner, Intel’s CFO.
“The current macro environment is creating elevated uncertainty across the industry, which is reflected in our outlook. We are taking a disciplined and prudent approach to support continued investment in our core products and foundry businesses while maximising operational cost savings and capital efficiency,” he added.
A major part of that investment is centred on AI. Intel’s Xeon 6 processors have been lauded for their strong performance in AI workloads, signalling that the company is starting to close the gap with competitors. This AI-focused strategy, paired with its foundry services, is expected to play a critical role in Intel’s recovery in the coming quarters.
Still, Intel’s traditional business lines remain under pressure. Revenue from the Client Computing Group fell 8 percent to $7.6 billion, mirroring broader market softness.
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Operationally, the company generated $813 million in cash from operations during the quarter and reduced its 2025 gross capital expenditure target to $18 billion, down from $20 billion previously, aided by improved utilisation of construction assets and tighter capital discipline.
Looking ahead, Intel offered a cautious forecast for the second quarter of 2025. The company expects revenue between $11.2 billion and $12.4 billion, with a projected GAAP loss of $0.32 per share and breakeven on a non-GAAP basis. Gross margins are forecast to remain under pressure, guided at 34.3 percent GAAP and 36.5 percent non-GAAP.
“We know where we need to go,” said Tan. “The road ahead is long, but we are laying the foundation for Intel to lead again.”
Boluwatife Omotayo
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