Intel Earnings Expectations and Stock Volatility

Intel is set to report Q3 earnings on Thursday, with traders expecting a significant move in the stock, potentially up to 10% in either direction. The company's first earnings report since the federal government took a nearly 10% stake in the company, Intel's shares have surged 90% since the start of the year. Analysts are skeptical about the stock's momentum, but investors will be hoping for updates on the company's investments and outlook for its struggling foundry business.

Intel (NASDAQ: INTC) is poised to report its Q3 earnings on Thursday, with traders anticipating a significant movement in the stock, potentially up to 10% in either direction. The company's shares have surged 90% since the start of the year, driven by a series of strategic investments and partnerships, including a $5 billion stake from Nvidia (NASDAQ: NVDA) and a nearly 10% equity stake from the U.S. government through the CHIPS Act, according to a TradingNews report.

Intel's remarkable rebound has been fueled by optimism surrounding its foundry business and AI initiatives. The company has announced plans to co-develop chips combining Intel CPUs and Nvidia GPUs, targeting the booming AI data center market, the TradingNews report said. Additionally, the U.S. government's investment underscores the company's importance to national semiconductor independence and strategic defense manufacturing, the TradingNews report added.

Despite the optimism, analysts remain divided over the stock's momentum. Morgan Stanley has raised its price target to $36 from $23, citing improving sentiment around Intel's foundry strategy, but warns that the stock's 100% rally since August may be overextended, the TradingNews report noted. Meanwhile, HSBC and Citi have downgraded Intel, calling the recent rally "unsustainable" and "driven more by news flow than numbers", according to a TS2 Tech article.

Intel's financial reality, however, remains challenging. The company reported a net loss of $2.92 billion for the second quarter of 2025, with gross margins under 30%, the TradingNews report said. CEO Lip-Bu Tan has responded with decisive restructuring efforts, cutting approximately 20% of its workforce and temporarily halting construction on select fabs to preserve cash, the TradingNews report added. The company does not expect to return to profitability until 2026, the TradingNews report concluded.

Investors will be closely watching Intel's earnings report for updates on its investments and outlook for its struggling foundry business. The company's market capitalization now stands at $177.38 billion, roughly half of AMD's, but the valuation gap is narrowing. Intel trades at a price-to-book ratio of 1.66, reflecting investor willingness to price in a partial turnaround despite ongoing losses, the TradingNews report observed.

The broader market backdrop has amplified the narrative. The Nasdaq rose 1.39% to 22,994.24, the S&P 500 climbed 1.01% to 6,731.19, and the Dow Jones Industrial Average advanced 0.79% to 46,554.18, buoyed by investor rotation into large-cap technology names, the TradingNews report noted.

Intel's position in this environment is precarious yet promising. The company is trying to rebuild its identity from a legacy PC-chip maker into a vertically integrated AI manufacturing powerhouse. Its foundry expansion in the U.S., strategic partnerships, and government backing give it geopolitical leverage unmatched by peers. However, until Intel converts optimism into consistent earnings growth, its valuation story will remain fragile.

At $38 per share, the stock trades near its short-term technical ceiling of $39.65, the 52-week high, with interim support at $35.50. Sustained momentum above this level could push the stock toward $42, though the rally's durability depends on October's earnings clarity. If management delivers concrete progress on cost control, foundry margins, and AI production timelines, the bullish narrative could gain real traction.

For now, Intel stands as one of 2025's most dramatic comeback stories—a company rediscovering its relevance amid global AI competition. The optimism is real, but so are the risks. The next 72 hours will determine whether this rally marks the start of Intel's true recovery or the peak of speculative enthusiasm. Investors holding the stock after such a steep climb may find it prudent to Hold, with potential upside if Intel's execution catches up to its narrative.