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Intel’s Stock Gains 3.8% Despite Losses – Will India’s 2025 Budget Align with Global Tech?

Intel’s Stock Gains 3.8% Despite Losses – Will India’s 2025 Budget Align with Global Tech?
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What does Intel’s latest earnings report mean for the global tech industry, and more importantly, how could it influence India’s upcoming 2025-26 Union Budget? As Intel navigates a challenging period marked by leadership transitions, struggles in the AI chip sector, and the evolution of its foundry business, the impact of these developments could extend beyond Wall Street. With India aiming to strengthen its semiconductor and technology infrastructure, Intel’s performance and strategic shifts could shape India’s policy decisions.

Intel’s Q4 Performance: Beating Expectations Amid Challenges

Intel (INTC) announced its fourth-quarter earnings, reporting earnings per share (EPS) of $0.13 on revenue of $14.3 billion. This exceeded analysts’ expectations of $0.12 EPS on $13.8 billion in revenue. However, the company provided a weaker-than-expected Q1 2024 forecast, projecting revenue between $11.7 billion and $12.7 billion, while analysts had expected $12.85 billion.
Source: Intel Q4 Report

Source: Yahoo! Finance

Despite these mixed results, Intel’s stock climbed 3.8% in after-hours trading. This rise came even though Intel’s shares had plummeted nearly 60% over the past year, as the company struggled to keep up with competitors like Nvidia and AMD in the AI chip race. The company also saw a decline in overall revenue compared to the previous year, falling 7% from Q4 2022’s $15.4 billion.

Intel’s long-term strategy is one of the biggest concerns for investors, especially as it undergoes a major leadership shift. The company’s former CEO, Pat Gelsinger, was ousted last month due to dissatisfaction with the pace of his ambitious turnaround plan. The absence of a permanent CEO has fueled uncertainty among investors, with interim co-CEOs David Zinsner and Michelle Johnston Holthaus leading the company. Source: Yahoo! Finance

Key Business Segments and Challenges

1. Foundry Business & External Revenue Potential

Intel’s foundry business is still in its early stages, but it has projected meaningful external revenue by 2027. The company aims to manufacture chips for Intel and third-party clients, a model similar to Taiwan’s TSMC. Despite securing agreements to build chips for Amazon’s AWS and Microsoft, the foundry division remains a drag on Intel’s revenue in the short term, bringing in $4.5 billion in Q4—meeting expectations but not exceeding them. Investors are closely watching whether this segment can drive long-term growth.

2. Client Computing & AI PC Market Struggles

Intel’s Client Computing business, which includes chips for PCs, reported $8 billion in revenue, slightly above the $7.8 billion analysts expected. However, Intel has faced challenges in leveraging the rise of AI-powered personal computers. According to IDC, The PC market remains flat, with global shipments rising just 1% in 2024.

3. AI Chip Market & Nvidia’s Dominance

One of the biggest setbacks for Intel has been its inability to capture a significant share of the AI chip market. The company recently shelved its Falcon Shores GPU, originally designed for AI applications, and is opting to use it as an internal test chip instead. Meanwhile, Nvidia continues to dominate the AI chip sector, with its stock rising 93% in the last year despite concerns about Chinese AI competition. Intel’s AI-focused Gaudi processors have also underperformed, leading the company to abandon its previous forecast of selling over $500 million of these chips in 2024.

Source: Intel Q4 Report

How Intel’s Performance Connects to India’s 2025 Budget

While Intel’s earnings report does not directly impact India’s Union Budget, global semiconductor trends influence government decisions. India has been pushing aggressively to establish a strong semiconductor manufacturing ecosystem. Here’s how Intel’s performance and broader market shifts could impact India’s policy decisions:

1. Foreign Direct Investment (FDI) & Market Confidence

A strong performance by Intel and other global chipmakers can boost investor confidence in the semiconductor sector. This could encourage foreign investment in India’s semiconductor initiatives under the Production-Linked Incentive (PLI) scheme. If global sentiment remains shaky due to Intel’s uncertain future, it could impact investments into India’s chip manufacturing sector.

2. Stock Market & Capital Gains Taxation

Intel’s stock movements can influence global markets, including Indian stock exchanges. A rising global tech sector generally leads to bullish sentiment in India’s IT and semiconductor stocks, potentially affecting capital gains tax collections and revenue forecasts in the budget. If Intel’s outlook remains weak, it could contribute to volatility in tech stocks, affecting overall market performance.

3. Semiconductor Policy & PLI Scheme Adjustments

The Indian government has significantly funded semiconductor manufacturing under the PLI scheme. Intel’s struggles and the broader semiconductor landscape might prompt India to refine its incentives to attract global manufacturers. If Intel eventually strengthens its foundry business, India may seek collaboration opportunities or increased incentives for domestic chip production.

4. Impact on Import Costs & Rupee Exchange Rate

If Intel’s earnings impact the U.S. dollar’s strength, it could influence the rupee’s exchange rate, affecting India’s import bill for electronics and semiconductors. A weaker Intel outlook could slow semiconductor price hikes, benefiting Indian manufacturers relying on imports. However, if Intel’s foundry business picks up, it might drive up chip prices, increasing India’s import costs.

5. AI & Tech Investments in India

India’s budget for 2025-26 is expected to emphasize AI and semiconductor manufacturing. With Intel failing to significantly impact AI chips, the Indian government may focus on supporting homegrown AI semiconductor development rather than relying on external players like Intel. Alternatively, India may partner with other global leaders like Nvidia and AMD.
Source: Times of India

Investor Sentiment & The Role of a New Intel CEO

One of Intel’s biggest uncertainties is the absence of a permanent CEO. Investors are keen on a leadership announcement clarifying the company’s future. A strong new leader could reinvigorate Intel’s turnaround plans, potentially stabilizing global tech sentiment and influencing semiconductor investments in India. On the other hand, prolonged uncertainty could add to market instability, impacting investment flows into India’s tech sector.

Conclusion

Intel’s latest earnings report presents a mixed picture—exceeding expectations in some areas while struggling in others. Despite long-term challenges, the stock’s 3.8% rise reflects cautious optimism, but uncertainties surrounding leadership and AI strategy remain.

For India, the implications are indirect but significant. The country’s 2025-26 budget will focus on semiconductor manufacturing, AI research, and foreign investment incentives. While Intel’s performance alone may not dictate India’s policy decisions, broader trends in the global tech industry will shape the budget’s approach to technology investments and semiconductor growth.

As the search for a new Intel CEO continues, investors and policymakers alike will watch closely to see how one of the world’s most iconic chipmakers navigates its path forward—and what that means for India’s ambitions in the tech sector.

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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