Analyst(s): Futurum Research
Publication Date: January 26, 2026
Intel’s Q4 FY 2025 showed resilient AI-driven demand across client and data center, with results above internal guidance but tempered by manufacturing and inventory constraints. Management emphasized 18A progress, a streamlined server roadmap, and supply improvement beginning in Q2 FY 2026.
What is Covered in this Article:
- Intel’s Q4 FY 2025 financial results
- AI PC (Core Ultra Series 3) ramp and 18A progress
- Data center CPU roadmap and ASIC traction
- Foundry, 18A/14A development and packaging
- Guidance and Final Thoughts
The News: Intel (NASDAQ: INTC) reported Q4 FY 2025 results. Revenue was $13.7 billion, down 4% year over year (YoY), versus Wall Street consensus of $13.4 billion. Client Computing Group revenue was $8.2 billion (-6.6% YoY), Data Center and AI was $4.7 billion (+8.9% YoY), and Intel Foundry was $4.5 billion (+3.8% YoY); All Other was $574 million (-48% YoY). Non-GAAP gross margin was 37.9% (-4.2 percentage points YoY). Non-GAAP operating income was $1.2 billion (Q4 FY 2024: $1.4 billion) with an operating margin of 8.8% (-0.8 percentage points YoY). Non-GAAP net income was $767 million (Q4 FY 2024: $568 million), and non-GAAP EPS was $0.15 (+15% YoY).
“We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond,” said David Zinsner, Intel CFO. “Demand fundamentals across our core markets remain healthy as the rapid adoption of AI reinforces the importance of the x86 ecosystem as the world’s most widely deployed high-performance compute architecture.”
Intel Q4 FY 2025: AI PC Ramp Meets Supply Constraints
Analyst Take: Intel’s print reflects continued traction from AI-related demand in both client and data center, but near-term manufacturing yield and inventory headwinds limit upside in Q1 FY 2026. Management’s focus on accelerating 18A yields, prioritizing server supply, and simplifying the CPU roadmap indicates a tighter execution posture. The AI PC platform launch on 18A, and the data center CPU/accelerator strategy provides a clearer product-market fit as hybrid AI scales. Foundry progress on 18A/14A and advanced packaging points to longer-term optionality, with supply gradually improving through FY 2026.
AI PC Platform and Hybrid AI Momentum
Intel launched three Core Ultra Series 3 (formerly Panther Lake) SKUs ahead of plan, built on Intel 18A, positioning AI PCs as a growth vector across premium to mainstream notebooks. Management cited favorable reviews, including up to 27 hours of battery life, a 70% generation-on-generation graphics uplift, and 50% to 100% better performance on industry benchmarks versus peers. Client AI PC units grew 16% sequentially, while Intel estimates the 2025 client consumption TAM exceeded 290 million units, signaling healthier PC fundamentals. However, limited finished goods inventory and 18A ramp costs weighed on near-term gross margin, with Q1 FY 2026 guided to 34.5% on a non-GAAP basis. As yields improve month over month and throughput increases, Series 3 cost structure should inflect from margin dilutive to accretive during FY 2026. AI PC momentum is solid, with hybrid AI use cases likely to accelerate refresh activity over the next several quarters.
Data Center CPU, Accelerators, and ASICs
Data Center and AI revenue rose 15% sequentially, the fastest sequential growth this decade, but shipments were constrained by limited internal supply. Intel is aligning traditional server and accelerated roadmaps, simplifying around Diamond Rapids (16-channel) and accelerating Coral Rapids with simultaneous multithreading reintroduced. A custom Xeon with NVIDIA NVLink is in development to optimize AI host nodes, reflecting a platform-centric approach to AI infrastructure. The custom ASIC business grew more than 50% in 2025, up 26% sequentially in Q4, reaching an annualized revenue run rate above $1.0 billion. Management sees CPUs as central to AI orchestration and scaling inference, with Granite Rapids and mainstream (Sapphire/Emerald) parts benefiting from broader AI adoption. Overall, data center positioning is improving, with supply normalization key to converting demand into revenue.
Manufacturing, Foundry, and Advanced Packaging
Intel is shipping revenue wafers on 18A—gate-all-around with backside power—out of Arizona and Oregon, and cited steady monthly yield improvements of roughly 7% to 8%. Intel Foundry Q4 revenue was $4.5 billion, with EUV wafer revenue mix rising from under 1% in 2023 to over 10% in 2025, though the operating loss widened to $2.5 billion on the early 18A ramp. External Foundry revenue reached $222 million, supported by U.S. government programs and Altera deconsolidation, while 18AP development is progressing, and 14A engagements with potential external customers are active. The company is pacing 14A capacity spending to firm customer commitments expected in H2 FY 2026 to H1 FY 2027, mitigating risk while advancing process and IP enablement. Advanced packaging (EMIB and EMIB‑T) is a focus area, with quality/yield improvements aimed at ramps beginning in H2 FY 2026. Taken together, the execution path is clearer, but yield acceleration and packaging readiness remain the levers to unlock mix and margins.
Guidance and Final Thoughts
Q1 FY 2026 guidance reflects the most acute internal supply constraints, with revenue of $11.7 billion to $12.7 billion (in line with the consensus estimate of $12.6 billion) and non-GAAP EPS of $0.00 (consensus estimate $0.08), before supply improves from Q2 onward. Management is targeting FY 2026 operating expenses of about $16.0 billion, while capital spending is now expected to be flat-to-down slightly year over year, more weighted to tools and to the first half. Non-controlling interest is guided to approximately $1.2 billion for FY 2026, with a Q1 share count of roughly 5.1 billion. Intel aims to first restore gross margins to 40% and then to a higher benchmark as 18A yields, product mix, and throughput improve. The setup for the year hinges on execution against yield, tool additions, and component availability (DRAM/NAND/substrates) that could temper client upside.
See the full press release on Intel’s Q4 FY 2025 financial results on Intel’s website.
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