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Intel Expects Chip Shortages on Better PC Demand. Here’s Why AMD Is Winning Too.

Oct 23, 2025 00:30:00 -0400 by Tae Kim | #Chips #Earnings Report

Intel stock has risen more than 90% this year. (Justin Sullivan/Getty Images)

Key Points

Intel stock opened up strongly on Friday after reporting solid results the previous day, but it couldn’t hold on to most of its gains.

After the market close Thursday, the company reported $13.7 billion of revenue for the September quarter, compared with analysts’ expectations for $13.2 billion. The company generated adjusted earnings per share of 23 cents in the quarter versus Wall Street’s consensus estimate for two cents adjusted EPS, according to FactSet.

Guidance was solid. Intel forecast revenue of $12.8 billion to $13.8 billion for the current quarter, versus the consensus call of $13.4 billion. Intel’s guidance excludes Altera, following the company’s sale of a majority ownership in the third quarter. Chief Financial Officer David Zinsner told Barron’s some analysts on Wall Street didn’t account for excluding Altera’s numbers in their estimates.

“Our stronger than expected Q3 results mark our fourth consecutive quarter of improved execution and reflect the underlying strength of our core markets,” Zinsner said in a release. “Current demand is outpacing supply, a trend we expect will persist into 2026.”

Intel shares were up 0.3% on Friday. The stock initially opened up 4.6% at the beginning of trading. The company’s shares are now up about 91% this year as it announced a flurry of capital raises in recent months.

Intel and Advanced Micro Devices uses the x86 chip architecture in making the CPU processors that act as the main computing brains for PCs and servers.

Created with Highcharts 9.0.1IntelSource: FactSetAs of Oct. 24

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In a phone interview with Barron’s, Zinsner said demand for PCs has been stronger than the company expected as corporations are upgrading computers to move to the current version of Microsoft Windows. Enterprises and cloud computing companies are also upgrading servers at a strong pace as every AI server needs a CPU processor, he said. The executive predicts Intel’s first quarter in 2026 will be the “most challenging” for the company to make enough chips to meet the robust demand.

Earlier this month, Microsoft officially ended support for Windows 10, which may be spurring upgrade purchases to PCs running Windows 11.

“The Windows refresh is happening more significantly than I think we expected,” Zinsner said on the earnings call with analysts.

When asked by an analyst about the coming supply issues, the executive added: “The shortage is pretty much across our business.”

Intel has been raising capital from a variety of sources. Last month, Intel announced a new partnership with Nvidia, part of which entails Nvidia investing $5 billion in Intel stock. In August, the company also announced an agreement for the U.S. government to make an $8.9 billion investment in Intel shares.

On Friday, Benchmark analyst Cody Acree reaffirmed his Buy rating and $50 price target on Intel shares, citing the Windows 11 upgrade cycle and the balance sheet improvement after the capital raises.

“We believe investors had a lot to be encouraged by in Intel’s report,” he wrote. “We expect the current positive momentum to continue through at least 2026.”

Acree cited Intel’s new PC industry forecast of 290 million units for client PCs this year, which would make 2025 the best growth year since 2001.

If Intel is benefiting from stronger than expected PC industry sales, that should also boost its main rival AMD, whose business accounts for the rest of the CPU market.

Investors are taking notice. AMD shares were up 7.6% on Friday.

Write to Tae Kim at tae.kim@barrons.com