Intel’s first quarter results for 2025 were met with a negative market reaction, as the company’s revenue remained flat year over year and inventory levels increased. Management attributed the quarter’s performance to stronger-than-expected demand for older generation chips, particularly Raptor Lake, which benefited from customer purchasing ahead of potential tariffs and ongoing macroeconomic uncertainty. CEO Lip Bu Tan, newly appointed, highlighted the need for cultural and organizational change, stating, “Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win.”
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Intel (INTC) Q1 CY2025 Highlights:
- Revenue: $12.67 billion vs analyst estimates of $12.34 billion (flat year on year, 2.6% beat)
- Adjusted EPS: $0.13 vs analyst estimates of $0 (significant beat)
- Revenue Guidance for Q2 CY2025 is $11.8 billion at the midpoint, below analyst estimates of $12.88 billion
- Adjusted EPS guidance for Q2 CY2025 is $0 at the midpoint, below analyst estimates of $0.06
- Operating Margin: -2.4%, up from -8.4% in the same quarter last year
- Market Capitalization: $91.95 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Intel’s Q1 Earnings Call
- Ross Seymore (Deutsche Bank) asked about balancing the need to fill foundry capacity versus executing Intel’s product roadmap. CEO Lip Bu Tan emphasized focusing on key products and gradually improving foundry reliability and customer trust.
- Timothy Arcuri (UBS) pressed for clarity on gross margin dynamics in light of product mix and tariffs. CFO David Zinsner explained that older products currently aid margins, but ramping new products and startup costs will be headwinds until next year.
- Stacy Rasgon (Bernstein Research) questioned why demand remains stronger for older chips instead of new launches. Michelle Johnston Holthaus, CEO of Intel products, cited customer price sensitivity and macroeconomic concerns as drivers of this trend.
- Srini Pajjuri (Raymond James) inquired about the sustainability of data center growth and competitive pressure from ARM. Holthaus responded that while there is strength in certain segments, macro factors and competition remain challenges for market share.
- Aaron Rakers (Wells Fargo) asked if OpEx guidance included the pending Altera divestiture. Zinsner clarified the current guidance assumes Altera is still consolidated, with future reductions as the sale closes.
Catalysts in Upcoming Quarters
In the coming quarters, our analyst team will monitor (1) progress on Intel’s organizational restructuring and cost reduction targets, (2) adoption and market response to new products like Panther Lake and Granite Rapids, and (3) the company’s ability to manage inventory levels and manufacturing capacity amid shifting customer preferences. Updates on foundry partnerships and the Altera divestiture will also be important indicators of execution.
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