--- title: "Intel: Selling assets with one hand and laying off employees with the other—can a leadership change save them?" description: "Intel released its Q1 2025 earnings report (as of March 2025) after the U.S. market close on April 25, 2025 Beijing time. Key points are as follows: 1. Core data: Revenue remained flat, gross margin d" type: "topic" locale: "en" url: "https://longbridge.com/en/topics/29144888.md" published_at: "2025-04-25T05:00:53.000Z" author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # Intel: Selling assets with one hand and laying off employees with the other—can a leadership change save them? Intel released its Q1 2025 earnings report (ending March 2025) after the U.S. market close on April 25, 2025, Beijing time. Key highlights: **1\. Core metrics: Flat revenue, gross margin slides again.** Intel reported Q1 2025 revenue of $12.67 billion, essentially flat YoY, near the upper end of guidance ($11.7-$12.7B). Client computing declined, but growth in Data Center & AI and other segments largely offset it. $Intel(INTC.US) **posted a net loss of -$820 million in Q1 2025, with widening losses** primarily due to gross margin erosion and increased non-recurring charges. **2\. Segment performance: Client keeps losing share; AI and foundry hold potential.** The company again adjusted segment reporting, **reclassifying Intel's product businesses into Client Computing and Data Center & AI segments**. **1) Client Computing:** Q1 revenue fell 7.8% YoY to $7.63B. **While global PC shipments grew +5.9% YoY, Intel's related revenue dropped -7.8%**, indicating continued market share loss. **2) Data Center & AI:** Revenue grew 7.8% YoY to $4.13B, driven by Xeon server sales and customers stockpiling ahead of potential tariffs. Traditional server and Altera businesses declined this quarter, showing no benefit from AI industry growth. **3) Intel Foundry:** Revenue reached $4.67B, but with ~$4.7B in internal offsets, **most wafer production still serves internal needs with minimal external customers**. **3\. Guidance:** **Q2 2025 revenue forecast of $11.2-$12.4B (vs. consensus $12.88B) and GAAP gross margin of 34.3% (vs. consensus 32.7%)**, both indicating sequential declines. **Overall view: Internal restructuring remains the focus amid stagnant performance** While Intel's earnings beat expectations with revenue near guidance highs and better-than-expected margins, fundamentals show no real improvement. **Forward guidance suggests continued revenue and margin erosion with no near-term turnaround.** Post-CEO transition, reporting segments were again restructured—Network & Edge is no longer separately disclosed. **Intel's product businesses now split clearly into Client Computing and Data Center & AI.** Details: 1) Client remains weak, underperforming the +5.9% PC market growth as **AMD keeps gaining share**; 2) Data Center & AI growth came from Xeon demand and **tariff-related inventory builds**, but **still lacks presence in core AI GPUs**; 3) Foundry remains internally focused with **minimal external customers**. New CEO Pat Gelsinger reaffirmed focus on **core x86, Data Center & AI, and 18A process development**, aligning with the new segment structure. All businesses show no recovery signs, while internal reforms dominate—segment realignment, ongoing layoffs (headcount down 28K YoY), and opex cuts ($1.3B reduction). The company recently agreed to sell 51% of Altera to Silver Lake at an $8.75B valuation (vs. 2015's $14.45B acquisition price), with plans for an eventual Altera IPO. **This loss-making divestiture underscores Intel's focus on core businesses.** Intel's three core segments (Client, Data Center & AI, Foundry) all show weak performance. Post-leadership change, internal reforms—restructuring, cost cuts, and asset sales—aim to sharpen focus. **Client defends traditional strengths, while Data Center & AI and Foundry offer future growth potential.** **However, three key challenges persist (AMD's competition in traditional markets, lack of GPU/AI traction, minimal external foundry customers)**, continuing pressure on revenue and margins. With gross margins needing to exceed 45% to avoid losses, breakthroughs in these areas could restore market confidence. **Dolphin Research's detailed analysis:** **1\. Core metrics: Flat revenue, margin erosion continues** **1.1 Revenue:** **Q1 revenue of $12.67B (-0.4% YoY)**, near guidance 上限 ($11.7-$12.7B). Data Center & AI growth offset Client declines. **1.2 Gross profit:** **$4.67B (-10.4% YoY)** on margin compression. **Gross margin fell 410bps YoY to 36.9%**, beating consensus (32.2%). **Seasonality and weaker Client margins drove the decline.** **Last quarter's "flash crash" to 15% margins included $3.1B in one-time charges. Adjusted operating margin was 38.4%.** **1.3 Opex:** **$4.973B (-20.9% YoY)** as headcount fell from 109K to 103K sequentially. Details: **1) R&D:** $3.64B (-16.9% YoY), 28.7% of revenue—still the largest expense despite cuts. **2) SG&A:** $1.18B (-16.9% YoY), 9.3% of revenue. **3) Restructuring:** $160M. **1.4 Net income:** **\-$820M loss** on margin pressure and non-operating charges. **Operating loss was -$300M**, worsening despite cost cuts. **2\. Segment deep dive: Client share loss continues; AI and foundry hold promise** Post-CEO change, Intel reorganized reporting segments into Client, Data Center & AI, Foundry, and All Other. **Network & Edge is no longer broken out; Altera and Mobileye now sit in All Other.** The restructuring highlights **Client and Data Center as Intel's revenue pillars**, with Foundry still primarily serving internal needs. **2.1 Client Computing** **Revenue fell 7.8% YoY to $7.629B** amid **market share losses to AMD**. Note: Some former Network & Edge revenue was reclassified into Client this quarter. Per IDC, Q1 global PC shipments rose 5.9% YoY to 63.2M units, but **Intel's Client revenue fell -7.8%**, indicating further share erosion. CPU-Z data shows Intel's CPU share at 56.3% as of April 1, 2025 (down 10pp YoY). **While still dominant in PC CPUs, AMD keeps gaining ground.** **2.2 Data Center & AI** **Revenue grew 7.8% YoY to $4.126B** on Xeon demand and tariff-related inventory builds. Altera was previously spun out, while some Network & Edge revenue was folded into this segment. On April 14, 2025, Intel agreed to sell 51% of Altera to Silver Lake at an $8.75B valuation (vs. 2015's $14.45B purchase price), targeting a 2025 close and eventual IPO. **This divestiture reflects both Altera's struggles and Intel's need to fund core R&D (e.g., process tech, Data Center expansion).** While Google's capex grew 43% YoY to $17.2B, **its GCP Next event highlighted cooling customer demand—a risk factor.** Intel remains underrepresented in GPUs/ASICs, the AI market's growth engines. **2.3 Intel Foundry** **Revenue rose 7.1% YoY to $4.67B**, but with $4.7B in internal offsets, **external foundry business remains minimal**. Despite weak external traction, **the new CEO prioritizes 18A process development**, aligned with U.S. manufacturing reshoring trends. Market expectations stay low, but 18A execution could change the narrative. **Dolphin Research's Intel coverage history:** 2025/1/31 earnings call: [Intel (Minutes): Targeting foundry breakeven by 2027](https://longportapp.cn/zh-CN/topics/26912777) 2025/1/31 earnings note: [Intel: Cost cuts help, but growth remains elusive](https://longportapp.cn/zh-CN/topics/26911627) 2024/11/1 earnings note: [Intel: Can shedding dead weight revive the giant?](https://longportapp.cn/zh-CN/topics/24996137) 2024/8/2 earnings note: [Intel: A dream gone up in smoke](https://longportapp.cn/topics/22892515) 2024/4/26 earnings note: [Intel: The sidelined AI spectator](https://longportapp.cn/topics/20753748) 2024/1/26 earnings call: [Intel 3—opportunity or mirage? (Q4 2023 call)](https://longportapp.cn/topics/11355741) 2024/1/26 earnings note: [Intel: Losing processor dominance, flailing in AI](https://longportapp.cn/topics/11349244) 2024/1/17 deep dive: [Intel: Is AI PC the lifeline for the "Tick-Tock" giant?](https://longportapp.cn/zh-CN/topics/11187200) Disclosures: [Dolphin Research disclaimer](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [INTC.US - Intel](https://longbridge.com/en/quote/INTC.US.md) - [04335.HK - INTEL-T](https://longbridge.com/en/quote/04335.HK.md) --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.