In August 2024, Intel (INTC) stock lost almost half its value. It fell from a July high of over $37 to as low as $18.51. Bargain hunters accumulated INTC stock since that time, betting the business would rebound.
In the third quarter, Intel posted a $0.46 a share loss. Revenue fell by 6.2% Y/Y at $13.28 billion. Markets liked Intel’s significant progress in cutting $10 billion in costs. In Q3, it took a $2.8 billion restructuring charge ($528 million non-cash and $2.2 billion in cast settled in the future).
CEO Pat Gelsinger pointed to the value maximization of its x86 franchise and customer interest for its 18A foundry. On the conference call, Intel said that Amazon (AMZN) is one of three new customers. In 2026, the firm will update investors on the progress of Panther Lake and Clearwater Forest. These are the next-generation processors.
Intel stock rose because the company reported better sell-through in Q3 than markets expected. In Q4, this strong sell-through will not repeat itself. It has higher start-up costs related to the 18A, for example. This will put pressure on its gross margins.
Products like Lunar Lake have memory chips built into the product. This will weigh on Intel’s gross margins in 2025. Conversely, the next product is Panther Lake. This has better margins as the firm ramps up production.
