Intel (INTC 0.21%) recently posted its first-quarter earnings report. The chipmaker's revenue came in flat year over year at $12.7 billion, which still beat analysts' estimates by $390 million. Its adjusted earnings per share (EPS) fell 28% to $0.13 but still cleared the consensus forecast by $0.13. Those headline numbers seemed stable, but its guidance was grim.
For the second quarter, it expects its revenue to decline from 3% to 13% year over year (compared to analysts' expectations for sales to remain flat), with an adjusted EPS of zero -- which also missed the consensus forecast of $0.07.
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In other words, investors shouldn't expect Intel's turnaround efforts to bear fruit anytime soon. But can the chipmaker's new CEO, Lip-Bu Tan, fix its ailing business and strike back against Advanced Micro Devices (AMD 0.67%) in the x86 CPU market?
What happened to Intel?
Intel is still the world's largest manufacturer of x86 CPUs for PCs and servers. But between the third quarter of 2016 and the second quarter of 2025, Intel's share of the x86 market plummeted from 82.5% to 58.2%, according to PassMark Software, which compares PCs. AMD's share rose from 17.5% to 40.3%.
That disastrous decline was largely caused by Intel's failure to keep pace with Taiwan Semiconductor Manufacturing in the race to manufacture smaller and denser chips. AMD, which didn't manufacture its own chips, outsourced its production to Taiwan Semiconductor's superior foundries -- which enabled it to produce smaller, cheaper, and more power-efficient chips than Intel. Meanwhile, Intel -- which struggled with delays, shortages, and abrupt CEO changes as it tried to keep up -- lost a lot of its business to AMD.
But that wasn't Intel's only failure over the past decade. It also failed to crack the mobile chip market, which it ceded to Arm Holdings, while missing the seismic shift toward AI chips, which Nvidia dominates with its discrete GPUs. It also di-worsified its business with too many messy acquisitions, and then hastily divested them when they didn't pay off.
That's why Intel's annual revenue declined from $55.87 billion in 2014 to $54.23 billion in 2024. Over the past 10 years, its stock price fell 34% as the S&P 500 advanced 160%. AMD's stock surged a dizzying 3,950% during the same period as its CEO, Lisa Su, drove the underdog chipmaker to reboot its engineering process and capitalize on Intel's mistakes.
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How does Intel's new CEO plan to turn around its business?
Before Intel brought in Lip-Bu Tan as its new CEO this March, many analysts speculated that it might sell its foundries to Taiwan Semiconductor (also known as TSMC) and its chip design business to Broadcom, or follow AMD's lead and become a fully fabless chipmaker. However, Tan quickly dismissed those rumors and suggested that Intel would continue to improve its engineering capabilities, develop more CPUs with integrated AI features, and expand its foundry business.
During Intel's first-quarter conference call, Tan reiterated those priorities and said it would streamline its business and divest its noncore assets (including the programmable chipmaker Altera in the second half of this year). Meanwhile, it's ramping up its smallest 18A process node to support the launch of its next-gen Panther Lake CPU for PCs in late 2025. It also expects its upcoming Granite Rapids Xeon 6 CPU to strengthen its defenses in the server market.
That road map seems feasible, but Intel's dim near-term outlook suggests its newest chips won't boost its near-term revenue and profits. Moreover, Intel plans to lay off a big percentage of its staff this year (rumored to be around 20%) to cut costs, and it's been outsourcing the production of some of its 2nm Nova Lake CPUs (which are scheduled to launch in 2026) to TSMC.
Those red flags suggest Intel will remain stuck in its previous cycle of trying to cut costs, rolling out new chips, and quietly relying on TSMC to pick up the slack. Meanwhile, AMD could continue to chip away at Intel with its Ryzen CPUs for PCs and Epyc CPUs for servers. In other words, Intel still hasn't explained how it will stop the bleeding and strike back at AMD.
But that's not all. Intel still needs to cope with the Trump administration's unpredictable tariffs and export curbs, its push to end the CHIPS Act subsidies for domestic chipmakers, and intense competition from TSMC in the foundry market. All of those challenges could make it even tougher for Intel to mount a meaningful recovery against AMD.
Is it too late to strike back against AMD?
Intel's losses in the mobile market, the discrete GPU market, and now its core CPU market indicate its business is suffering from some deep-rooted issues. AMD was led by one dynamic CEO over the past decade, while Intel was led by four different ones.
The contrarian investors might believe that Lip-Bu Tan might succeed where three predecessors failed, but I don't see any green shoots yet. So for now, I think it's too late to assume Intel can fend off AMD in the x86 CPU market.
