Intel(US:INTC) Waton Financial·2025-08-15 10:42Investment Rating - Investment Rating: Hold [2] Core Views - Intel's Q2 2025 revenue reached $12.9 billion, flat year-over-year and up 1.8% quarter-over-quarter, exceeding market expectations of $11.9 billion, but profitability metrics declined across the board [3][10] - The company is undergoing significant restructuring, including a 15% reduction in workforce, aiming to streamline operations and improve efficiency [4][12] - Intel faces intense competition from rivals like NVIDIA and AMD, and is in a critical transformation phase, with future performance hinging on successful execution of its advanced process technologies [15] Financial Performance - Q2 2025 GAAP net loss was $2.9 billion, widening 81% year-over-year, marking the sixth consecutive quarter of losses; GAAP loss per share was $0.67, while Non-GAAP loss per share was $0.10 [3][10] - Gross margin fell significantly from 35.4% in the same quarter last year to 27.5%, a decline of 7.9 percentage points, primarily due to cost control issues and competitive pricing pressures [10] - For Q3 2025, Intel expects revenue between $12.6 billion and $13.6 billion, with a GAAP loss per share of $0.24 and Non-GAAP earnings expected to be zero, indicating a potential narrowing of losses [4][15] Business Development - Intel's Client Computing Group (CCG) revenue was $7.9 billion, down 3% year-over-year, while the Data Center and AI Group (DCAI) revenue was $3.9 billion, up 4% year-over-year, showcasing growth in competitive segments [11] - The company is optimizing its global manufacturing footprint, halting projects in Germany and Poland, and consolidating operations in Costa Rica to Vietnam and Malaysia [4][13] - The launch of new Xeon processors and advancements in the 18A process node are seen as significant technological achievements for Intel [11][13] Financial Forecast - Projected revenues for Intel are expected to grow from $53.1 billion in 2024 to $75.2 billion by 2027, with a notable recovery in operating profit anticipated by 2026 [4][7] - The operating profit margin is expected to improve from -8.87% in 2024 to 7.00% by 2027, reflecting a turnaround in profitability [7][8] - The net profit is forecasted to shift from a loss of $11.8 billion in 2024 to a profit of $4.4 billion by 2027, indicating a significant recovery trajectory [7][8]