Intel’s Q1 numbers impress, but Washington looms large

Intel Corp (NASDAQ:INTC, ETR:INL) delivered a much-needed boost to investor confidence with a better-than-expected first quarter.

Revenues came in at $12.7 billion, well ahead of forecasts, and earnings per share reached $0.13, a clear beat on the $0.01 analysts had pencilled in.

For shareholders on both sides of the Atlantic, it was a reminder that the company still knows how to deliver on the basics.

Short-lived

But any early relief was short-lived. Guidance for the second quarter came in below expectations, sending shares down more than six per cent in after-hours trading. Intel now expects revenue between $11.2 billion and $12.4 billion. Wall Street had been looking for $12.8 billion.

The problem is not performance, but politics.

The Trump administration is tightening the screws on China, and with tariffs on laptops and semiconductors reportedly under consideration, Intel finds itself in a vulnerable spot.

While most chips are manufactured in the US, a significant share of assembly still happens in China. If those finished goods are hit with duties, Intel could face pressure on pricing and margins.

Upfront on tariff threat

The company was upfront about the risks. “The current macro environment is creating elevated uncertainty across the industry,” said chief financial officer David Zinsner.

Intel will continue to invest in its core business and foundry ambitions, but it is watching costs and capital allocation carefully.

Beneath the headlines, there were bright spots. Revenue from client computing – its PC chip division – hit $7.6 billion, ahead of expectations. The data centre and AI business delivered $4.1 billion, beating the $2.9 billion consensus. Even its foundry unit posted stronger-than-expected figures.

Still challenging 

Still, none of that changes the underlying challenge. Intel is in the early stages of a long turnaround under new chief executive Lip-Bu Tan. The company wants to become a serious player in third-party chip manufacturing, but analysts remain divided on whether that strategy is viable.

The broader backdrop is not helping. If trade tensions escalate, it will not just be Intel that feels the squeeze. Alphabet’s upbeat results earlier this week were also accompanied by concerns over tariffs, while other tech giants are increasingly reluctant to offer forward guidance.

For UK investors, the message is clear. Intel is showing early signs of recovery, and the fundamentals are improving. But geopolitics may have the final say. Keep an eye on Washington as much as Silicon Valley.