Intel’s Q2 2025 earnings call painted a revealing picture of a company in transition, not just financially but structurally. The performance of Intel’s key business segments underscores a shift in momentum, from legacy PC dominance toward a more data- and AI-centric portfolio. With a net loss of $2.9 billion and declining revenues in core areas, investors are now asking: Which parts of Intel are actually working?
The Client Computing Group (CCG), long the company’s bread and butter, brought in $7.9 billion, marking a 3% year-over-year decline. This signals continued stagnation in global PC demand, despite cyclical rebounds in other parts of the industry. Intel’s mobile and desktop processors, many of which are still on older nodes have lost ground to competitors like AMD and Apple Silicon.
Meanwhile, the Data Center and AI Group (DCAI) grew 4% to $3.9 billion, suggesting early signs of strength in Intel’s effort to regain relevance in high-performance computing and AI acceleration. Products like Gaudi 3, which aim to rival Nvidia’s dominance in the AI training market, are still in their early go-to-market phase, but customer interest appears to be building.
Intel’s Foundry Services, though still a small portion of overall revenue, increased 3%, reflecting Lip-Bu Tan’s bet on refocusing foundry efforts around 14A instead of 18A. Tan’s strategic emphasis on foundry clients like Microsoft and Amazon is placing Foundry Services under a brighter spotlight, even though it has yet to land the kind of anchor customers that would mark a true comeback.
Financials: Losses Across the Board, With Foundry as a Sliver of Hope
Intel reported a revenue of $12.9 billion, down from $13.2 billion last quarter, and an operating loss that includes $1.9 billion in restructuring costs, mainly due to workforce reductions and project delays. The losses stretch across all segments but are particularly sharp in underperforming legacy units. Still, with Foundry Services showing growth, there’s optimism around a more focused and possibly profitable future.
Technology: Segments Aligned With New Roadmap
The segment performance reveals which technologies Intel is backing. Declining CCG results suggest the company will continue to de-emphasize consumer-centric technologies and instead double down on server chips, AI accelerators, and foundry nodes tailored for hyperscaler customers. Internal development of Panther Lake on 18A will continue, but 14A is now the node around which customer-aligned segment strategies are built.
Jobs: Segment Cuts Reflect Strategic Priorities
Intel’s 24,000 job cuts were not evenly distributed. Much of the downsizing occurred in manufacturing groups tied to 18A and legacy desktop products. However, growth areas like DCAI and Foundry Services saw headcount protected or even slightly expanded, indicating that segment-level performance is directly shaping personnel decisions. Engineers working on 14A, chiplets, and high-performance compute platforms remain in demand.
Strategy & Leadership: Segmentation Reflects a Pivot
Under CEO Lip-Bu Tan, Intel’s segmentation strategy is becoming more functional and performance-driven. The company is gradually moving away from top-down roadmap enforcement and toward customer-led priorities. Each segment is now expected to justify investment based on ROI, design wins, and customer traction, not historical importance. This shift has led to deeper board-level scrutiny of underperforming groups like CCG.
Market Context: Segments Must Win to Compete
In the broader semiconductor landscape, Intel’s segment structure faces relentless pressure. AMD and Nvidia continue to dominate data center and AI markets, while TSMC and Samsung command overwhelming foundry loyalty from global fabless giants. Intel must use its segment-level growth, especially in DCAI and Foundry, as proof points for a broader turnaround story. Investors and customers alike are watching closely.
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