Intel Corp (NASDAQ:INTC, ETR:INL) reported third quarter earnings that exceeded both its own guidance and Wall Street expectations, sending its shares modestly higher on Friday morning to about $39.
The report promoted a mix of cautious optimism and tempered outlooks from analysts at Wedbush and Baird.
The chipmaker posted revenue of $13.7 billion for Q3, well above the guidance midpoint of $13.1 billion, and EPS of $0.23, beating the forecast of $0.00.
Intel’s revenue growth was driven largely by stronger-than-expected demand for PCs and server CPUs, with the company noting that it was unable to fully meet customer orders.
Wedbush maintained a ‘Neutral’ rating on Intel, highlighting that near-term outperformance may have contributed to the stock’s post-earnings rise.
The analysts wrote that they were “not certain how sustainable better end demand trends will be beyond the next few quarters,” pointing to continued competition from AMD and rising memory costs as potential headwinds.
However, they noted that management’s commentary was more constructive regarding future manufacturing capabilities, particularly progress on the 18A and 14A nodes.
“Intel’s results/guide suggest end markets will grow through Q4, and possibly into Q1 given constraints, painting upside to TSMC’s more modest guide,” Wedbush wrote.
The firm raised its price target to $30, citing valuation concerns but acknowledging solid near-term trends.
“This shift in tone give us somewhat more confidence that Intel is making progress with is future manufacturing and chip design endeavors, which remain the primary factors that are likely to dictate Intel's longer term performance in our view,” they wrote.
Baird also reiterated a ‘Neutral’ rating and set a new price target of $40, noting that Intel’s turnaround remains a multi-year process.
The analysts described performance and yields on the 14A process as “promising,” with management showing increased confidence in customer engagement.
Baird also highlighted that while gross margins will remain subdued due to cost structure improvements and data center CPU competitiveness, successful adoption of the 14A process or strategic partnerships could provide additional upside.
US-based production of critical semiconductor components continues to serve as a favorable tailwind, the firm also pointed out.
“14A represents the largest potential breakthrough for Intel for 2026, while gross margin will remain subdued as cost structure improvement remains a multi-year process and data center CPU competitiveness is also work in progress,” Baird wrote.