Can Solid Processor Revenues Boost Intel's Q3 Earnings?

Intel Corporation INTC is scheduled to report third-quarter 2025 earnings after the closing bell on Oct. 23. In the to-be-reported quarter, the company is likely to have recorded higher revenues from the Client Computing Group (CCG) segment despite high customer inventory levels and a conservative approach toward placing orders for high-value items.

Factors at Play

CCG is the company’s largest segment and accounts for the lion’s share of total revenues. It includes computer CPUs, several server boards, form factor systems and graphic products.

During the quarter, Intel extended its collaboration with Amazon Web Services, Inc. (“AWS’”). The partnership involves co-investment by the companies in custom chip designs under a multi-year, multi-billion-dollar framework. Under this expanded agreement, the semiconductor company will develop an AI fabric chip for AWS, leveraging its most advanced Intel 18A process node. Additionally, a custom Xeon 6 chip was produced on Intel 3, strengthening its existing partnership in which Intel provides Xeon Scalable processors for AWS. These developments are likely to have supported the CCG segment’s top line during the quarter.

Intel's innovative AI solutions are set to benefit the broader semiconductor ecosystem by driving down costs, improving performance and fostering an open, scalable AI environment. It has secured a $5 billion investment from NVIDIA to jointly develop cutting-edge solutions that are likely to play an integral role in the evolution of the AI infrastructure ecosystem. In August 2025, Softbank invested $2 billion in Intel to propel AI research and development initiatives that support digital transformation, cloud computing and next-generation infrastructure. The U.S. government will invest $8.9 billion in Intel to support critical semiconductor manufacturing and advanced packaging projects in Arizona, New Mexico, Ohio and Oregon, likely paving the way for innovation and growth.

However, Intel has been facing challenges due to the disruptive rise of over-the-top service providers in this dynamic industry. Price-sensitive competition for customer retention in the core business is expected to intensify in the coming days. Aggressive competition is likely to limit the ability to attract and retain customers and affect operating and financial results.

Moreover, high raw material prices due to Middle East tensions, the prolonged Russia-Ukraine war and the consequent economic sanctions against the Putin regime have affected the operation schedules of various firms, affecting Intel’s demand schedule. High technological obsolescence of most products has further escalated operating costs.

Overall Expectations

The Zacks Consensus Estimate for CCG revenues is pegged at $8.13 billion, indicating an improvement from $7.33 billion in the year-ago quarter. Our estimate for revenues from this segment is $8.02 billion, suggesting a 1.7% year-over-year decline.

For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $13.11 billion, which indicates a decrease from the year-ago quarter’s reported figure of $13.28 billion. The consensus estimate for break-even earnings suggests an improvement from a loss of 46 cents reported in the prior year.

Earnings Whispers

Our proven model predicts an earnings beat for Intel for the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. 

Intel currently has an ESP of +116.67% with a Zacks Rank #3. 

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are some other companies you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this season:

InterDigital, Inc. IDCC is set to release quarterly numbers on Nov. 4. It has an Earnings ESP of +17.32% and carries a Zacks Rank #1. 

The Earnings ESP for Monolithic Power Systems, Inc. MPWR is +0.77% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Oct. 30.

The Earnings ESP for Qualcomm Incorporated QCOM is +1.43% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Nov. 5.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research