Intel Returns to Profitability in Third Quarter

Summary

Bloomberg Intelligence Podcast: “Intel Returns to Profitability in Third Quarter”

Date: October 24, 2025
Hosts: Scarlet Fu & Paul Sweeney
Key Guests: Kunjan Sobhani (Senior Semi Analyst, Bloomberg Intelligence), Craig Trudell (Global Autos Editor, Bloomberg), Jen Bartash (Senior Retail Analyst, Bloomberg Intelligence)

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Episode Overview

This episode dives into three major business stories: Intel’s financial turnaround and strategic repositioning, the evolving landscape of the US auto industry with particular focus on Ford and General Motors, and broad shifts in retail as Target announces significant corporate layoffs. The hosts and expert analysts examine the underpinnings of each story, offering context and insights on what recent developments mean for these industries and the wider market.

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1. Intel’s Return to Profitability & Strategic Shifts

Key Discussion Points

• Market Reaction to Intel’s Results

  • Intel reports unexpectedly strong Q3 numbers, with the stock rallying and up 92% YTD.
  • The rally was initially fueled by headline-making deals (US Government, Nvidia, Softbank) rather than business fundamentals.
    • "The stock rally you mentioned over the last few months has not been driven by any fundamental improvements. It was all purely driven by the deals... which all together brought in somewhere between $16 to $18 billion to them." – Kunjan Sobhani [02:23]

• Actual Business Improvements and Turnaround Signs

  • Improved demand for AIPC and server CPU products.
  • Steps to ramp up foundry operations, particularly in Arizona with the advanced Intel 18A node, promising better cost structures.
  • Increased OPEX discipline and structural changes point to potential for future gross profit growth, even though gross margina remain under pressure.
  • “Bringing more wafers into Intel, ramping up the Arizona Foundry... So they're doing many steps in the right direction, improving OPEX discipline as well. So all of that seems to be a start of a good turnaround.” – Kunjan Sobhani [02:23]

• Impact of Major Investments

  • US Government, Nvidia, and Softbank investments shore up Intel’s balance sheet, indirectly boosting customer confidence by alleviating liquidity and existential risk concerns.
    • "There is some indirect influence... the risk of liquidity risk with Intel... goes away. So customers, big customers would gain some trust, right?" – Kunjan Sobhani [04:05]

• Competitive Landscape

  • Fierce competition, especially in foundry and product markets.
  • Intel is catching up in AI/data center chips, a segment dominated by Nvidia and AMD.
  • Share loss in data centers has stabilized, but regaining ground is critical. Strategic shift focuses capacity on lucrative data center customers, even at the expense of low-end PCs.
    • “They've been losing share significantly in the data center side... but slowly... the share loss pace reduced, staying steady quarter over quarter.” – Kunjan Sobhani [04:49]

• Leadership & Culture Under New CEO Libbu

  • Marked difference from predecessor Pat Gelsinger—Libbu is seen as pragmatic, committed to cultural and structural change, and promoting accountability.
  • “Libbu seems to be more practical, sort of under promising and over delivering, which usually the street likes. Pat on the other hand was visionary but was trying to get to the stars before focusing on the moon.” – Kunjan Sobhani [05:57]

Memorable Quotes

• “There’s still a long way to go. Execution still needs to be done for many quarters. But this is the good news.” – Kunjan Sobhani [02:23]
• “Libbu has done a lot of cultural changes, significant restructuring, middle management, you know, getting everyone back to the office, which he really believes will bring significant culture and working changes.” – Kunjan Sobhani [05:57]

Timestamps

• [01:40] – Intel’s market performance and initial discussion
• [02:23] – Analyst breakdown: why the recent rally and structural improvements
• [04:05] – Effects of external investments
• [04:49] – Competition, market share, and business strategy
• [05:57] – Comparing CEOs Libbu and Gelsinger, culture & leadership

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2. US Auto Industry: Ford, GM, & EV Strategies

Key Discussion Points

• Strong Earnings vs. Ongoing Layoffs

  • Despite strong earnings, GM and Ford are announcing layoffs as they optimize product lines around profitable models, largely full-size SUVs.
  • The industry faces cost pressures from tariffs, though recent policy changes have provided some relief.
    • “[SUV] vehicles are really hot... as good as these companies have seen... and yet also real cost issues in terms of tariffs.” – Craig Trudell [09:41]

• Tariff Maneuvering & Competitive Dynamics

  • Detroit automakers are leveraging new truck tariffs that disadvantage rivals like Stellantis (Ram pickups produced in Mexico).
    • “It’s a case of actually two players in Detroit kind of ganging up on the third and... praising Trump.” – Craig Trudell [11:07]

• EV Investment Caution

  • GM is further along in EV and battery investments than Ford, but both are dialing back on EV expansion given disappointing consumer uptake and shrinking incentives (e.g., loss of $7,500 tax credit).
  • “We have not seen the ramp up in demand that was hoped for... And so you’re seeing GM cut back. I think Ford’s cutting back predated some of these policy changes—it’s more to do with the fact that they’ve just been losing so much money on that side.” – Craig Trudell [12:15]

• Subprime Lending and Consumer Risk

  • Recent bankruptcies among subprime auto lenders (Prima Lend, Tricolor) have raised questions about credit exposure. GM and Ford’s captive finance arms focus on higher-credit borrowers, limiting direct risk from subprime fallout.
    • “Ford Motor Credit... did emphasize just sort of how small amount of exposure they have from a subprime perspective... The captive lenders at Ford and GM tend not to play in that necessarily.” – Craig Trudell [13:56]

Notable Quotes

• “It’s hard to parse because you’re seeing GM and Ford have... strong earnings reports, huge moves... and yet GM is laying off hundreds of workers.” – Craig Trudell [09:41]
• “There was a lot of concern years ago when GM... acquired a subprime lender and everybody said, hey, wait a minute... Isn’t this kind of what put GM in the ditch back in 2008, 2009?... But really they’ve also turned GM Financial into a captive lender that does a lot of higher credit scores.” – Craig Trudell [13:56]

Timestamps

• [09:12] – Ford’s Q3 performance, shift to profitable models, layoffs
• [10:57] – Impact of automotive tariffs and Detroit’s political maneuvering
• [12:15] – Rationalization of EV investments
• [13:35] – Subprime lending risk and finance arms

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3. Target Layoffs and the Retail Outlook

Key Discussion Points

• Target’s Corporate Job Cuts

  • Target is cutting about 1,800 corporate jobs (1,000 existing, 800 unfilled postings), joining other retailers in streamlining post-pandemic redundancies.
  • “This is to us signals that they’re finally really looking at how to streamline the organization, tighten things up and hopefully initiate change a little bit faster.” – Jen Bartash [18:36]

• Broader Retail Trends

  • Other large retailers like Walmart are also reducing corporate headcount as pandemic-era supply chain excesses are unwound.
  • Streamlining is seen as timely and necessary, not unusual.

• Holiday Season Outlook

  • Staff cuts are focused on corporate, not customer-facing roles. No effect on stores or seasonal staff.
  • Inventory was pre-ordered early in the year, so holiday goods are on hand.
  • Consumer spending is resilient but value-driven; retailers expect holiday promotions to be spread out to avoid January credit card crunch.
    • “We think we’re going to see much more spread out deals and people spending... on a spread out basis so that they don’t get hit hard by big credit card bills in January.” – Jen Bartash [21:14]

• Tariff Pressures on Pricing

  • Tariffs still threaten to push up prices in certain categories, but retailers are trying to hold off price increases by negotiating with suppliers.
    • “There will be certain categories that will be influenced by tariffs. All the retailers are saying they’re using price increases as the last possible resort.” – Jen Bartash [22:13]

Notable Quotes

• “ ...Target’s not alone. Walmart, you know, earlier this year has also announced corporate head cuts. And so I think this is a normal course of business, but it’s a good time for Target to do so.” – Jen Bartash [19:08]

Timestamps

• [18:07] – Target’s job cuts and what they signal
• [19:08] – Industry context: pandemic redundancies and retail trends
• [20:08] – Holiday season preparation: inventory and staffing
• [21:14] – Consumer behavior and promotional strategy
• [22:13] – The tariff effect and price management strategies

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Summary Table: Key Timestamps

| Time | Segment | Key Guest | |---------|---------------------------------------------|----------------------| | 01:40 | Intel’s Q3 performance and investments | Kunjan Sobhani | | 04:49 | Intel competition and data center focus | Kunjan Sobhani | | 05:57 | Intel leadership change, CEO comparison | Kunjan Sobhani | | 09:12 | Ford’s strong earnings, layoffs, tariffs | Craig Trudell | | 12:15 | GM/Ford’s evolving EV strategies | Craig Trudell | | 13:56 | Auto finance, subprime lending exposure | Craig Trudell | | 18:07 | Target’s layoffs and retail industry context| Jen Bartash | | 20:08 | Holiday season strategies for retail | Jen Bartash |

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Conclusion

This episode highlights a pivotal week for three major sectors:

• Tech (Intel): Real business improvement is starting to catch up with optimistic deal-fueled sentiment, while deep organizational change under new CEO Libbu could redefine Intel’s competitiveness.
• Autos (Ford, GM): Traditional automakers are reframing their profit engines and cautiously reassessing EV investments amid political and market turbulence, with finance risks in tighter focus.
• Retail (Target): Leaner corporate structures are the post-pandemic norm, as companies position for a cautious but steady consumer and a challenging, promotion-heavy holiday season.

For listeners or readers seeking a snapshot of American economic adaptation in 2025, this episode provides a real-time, expert-powered perspective from across tech, autos, and retail.

Transcript

[Host]

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[Co-Host]

Getting back to earnings, intel, our good friends out there in Southern California and out in the valley, they reported some pretty darn good numbers and the stocks rallying. And I was just looking at intel as a stock and I guess when the government invests in you and Nvidia invests in you, that's a pretty good sign of support. The stock is up about 7/10 of 1% today, but it's up 92% year to date. Kunjan Sobhani, he follows Intel. He's a senior analyst. He covers the semis for Bloomberg Intelligence. He's based out there in our San Francisco office. Have you been to our San Francisco office?

[Host]

I have.

[Co-Host]

It is awesome. Year six, I think up here three, I can't remember which one it is, but it's awesome out there, right out into the bay. It's very cool. Kun John, talk to us about intel here. What's happening with their business?

[Kunjan Sobhani]

Yeah, I mean look, the results yesterday sort of seemed start of a turnaround for us. Fundamentally, the stock rally you mentioned over the last few months has not been driven by any fundamental improvements. It was all Purely driven by the deals that the three deals the US Government, Nvidia and the Softbank deal, which all together brought in somewhere between 16 to 18 billion dollars to them. That brings in long term secular tailwinds, or not secular, but strategic tailwinds, but doesn't do anything to improve the near term fundamental businesses and address the challenges. However, the results yesterday showed a step in the right direction where improving the demand for their AIPC and the server CPU products improved, which we have been wanting to see for a while. There were some structural changes that they are doing which will help with gross profit improvement, gross profit dollar improvement going forward even though the gross margin will still have headwinds next year. But we like the structural changes they are doing. Bringing more wafers into intel, ramping up the Arizona Foundry with their newest Intel 18 a node which is, which just has better cost structure than any other sites that they have. So they're doing many steps in the right direction, improving OPEX discipline as well. So all of that seems to be a start of a good turnaround. And you know, there's still a long way to go. Execution still needs to be done for many quarters. But this is the good news.

[Host]

I'm so glad you brought up the investments from the US Government, Nvidia and Softbank as something that helps certainly short the balance sheet. But how does it translate into operational gains? I mean do customers decide to buy Intel's chips in meaningful volumes as a result?

[Kunjan Sobhani]

I mean not directly, not implicitly. The deals don't come with that. But you know, there is some indirect influence. Right. Or you might want to call it validity that now, you know, the risk of liquidity risk with intel which was there until a few quarters ago, the risk of sort of failing the foundry business failing or not investing goes away. So customers, big customers would gain some trust, right. That when you have backing of such, such key players in the industry, they must believe in you.

[Co-Host]

So Kun, John, talk about the competitive environment here. So Intel's made, you know, some nice inroads here, but there's a lot of competition out there in their, in their chip fab business. Talk to us about the competitive landscape.

[Kunjan Sobhani]

Yeah, I mean the competition for them both on the foundry side and the product side is intense. Frankly speaking, they have really missed out on the AI et cetera accelerator and the really AI in the data center ramp which all of their peers like Nvidia AMD are enjoying. So they're playing catch up when it comes to most areas. The second issue in competition has been that they've been losing share significantly in the data center side. Again, this is the most profitable, highest spend side. This is where you really don't want to lose share. But slowly we have seen the share loss pace reduce almost coming sort of staying share loss steady quarter over quarter. So now they need to work on improving which the changes that they are doing going forward which is moving the capacity to serve the data center customers at the expense of low end PC customers we think is the right step to, you know, not you don't want to lose share in that market anymore.

[Host]

Right. So how different is Liputin, the CEO's strategy versus Pat Gelsinger, his predecessor who was let go? Is there a meaningful difference?

[Kunjan Sobhani]

That's a huge difference. I think from a personality communication strategy perspective it's the two opposite ends. Libboo seems to be more practical, sort of under promising and over delivering, which usually the street likes. Pat on the other hand was visionary but was trying to get to the stars before focusing on the moon. So very different styles. Libbu has done a lot of cultural changes, significantly significant restructuring, middle management, you know, getting everyone back to the office, which he really believes will bring significant culture and working changes. So a lot of different opinions, different styles. It's too soon to say which style is going to win, but at least we are seeing some good proof points of the new culture shift.

[Co-Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

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You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Co-Host]

Let's talk about the auto business here. Ford, holy cow, they had some good numbers. And I think the automakers are kind of saying we're focusing on the units, the, the, the models that make us a lot of money.

[Host]

And they're not EVs.

[Co-Host]

No, they're not. They're kind of dialing back that rhetoric a little bit in response to, I guess what they're seeing in the market. Craig Trudell, he's a Bloomberg Global Autos editor. Craig, talk to us about Ford. They had some, some, some good numbers, but I'm also seeing some layoff discussion out there. Talk to us about Detroit. What's happening?

[Craig Trudell]

Yeah, it's been quite a week. It's hard to parse because you're seeing GM and Ford have these, you know, strong earnings reports, huge moves. President Trump is, is taking victory laps over this on True Social. And yet this morning our colleague David Welch in Detroit had the scoop that GM is laying off hundreds of workers. So you have this, this situation where as you say, the amount of sales these companies are pulling off with full size SUVs, you know, the Ford Expeditions, the Chevy Tahoe's, those sorts of things. Vehicles are really hot in some cases, you know, as, as, as good as these companies have seen and something on the order of two decades. And, and yet also with that, you know, real cost issues in terms of tariffs, I think maybe not the worst case scenario that they were concerned about months ago, but absolutely those were still, still headwinds. I think there is a concerted effort on the part of these two companies, however, to sort of, you know, really thank Trump for the. These sort of incremental bits of relief that he's taken off from of the measures that, that were put in place earlier this year.

[Host]

Is that part of it done? Is that part of the story over? Are they still working to kind of continue to whittle away at some of the costs imposed by the President's policies?

[Craig Trudell]

I think it's still very much a live issue. And interestingly, you know, some of the, the attempts to sort of curry favor with the White House seems to be around actually sort of applauding his move to put new tariffs in place on medium and heavy trucks. And the reason that they are appreciating that is because their rival Stellantis makes Ram big, big Ram pickups down in Mexico. So it's a case of actually two players in Detroit kind of ganging up on the third and sort of, you know, praising Trump. And I think that was one of the interesting storylines out of last night's earnings that Ford sees, you know, sort of some incremental opportunity to take advantage of the fact that one of their big competitors now faces much more of a tariff bill on those larger pickups that are made down in Mexico.

[Co-Host]

Craig, reading between the lines from the GM release and then the Ford results, it feels like these companies are stepping back on the margin from EVs and EV investments. And that seems to be one of the things that the street is applauding here. How do, how do you read it?

[Craig Trudell]

Yeah, I think it's a little different across these, these two companies where you have, GM has, is much further along, I would say, in standing up battery capacity, standing up EV capacity as well. So they, I would say, on the other hand, have, you know, kind of, on one hand have more, more EV potential and more battery potential to work with and haven't quite sort of cut to the bone in terms of, you know, what they have to offer. And yet I would say it's also been the case that, you know, it's fair to look at sort of what they've managed in terms of how many EVs they're selling. And, and fair to say that it's been a real disappointment. It has. We've not seen the ramp up in demand that was hoped for, you know, even in the times when we were able to take advantage of $7,500 federal tax credits, as we know that those days are now gone. And so you're seeing GM cut back. I think Ford's Cutting back sort of predated some of these policy changes. And it's more to do with the fact that they've, they've just been losing so much money on that side of the business and have a little bit less to work with in terms of progress in scaling up the business and bringing down costs thanks to that scale.

[Host]

Craig, did we learn anything from GM or Ford's financing divisions about consumers and how much they're able to, how much debt they're able to take on? And I ask because of course we had the subprime lender Prima Lend enter bankruptcy this week that followed Tricolor entering bankruptcy a few weeks ago. So there are a lot of questions about credit quality, particularly for low end consumers or low income consumers.

[Craig Trudell]

Excuse me, this absolutely came up, you know, with Ford in particular, because Ford Motor Credit is a pretty, you know, big, big part of that company's business. They did emphasize just sort of how small sort of amount of exposure they have from a subprime perspective. I think that's not necessarily a shock where you do have a situation where there's a lot of subprime lender lenders willing to sort of, you know, go after that business. And the captive lenders at Ford and GM tend not to play in that necessarily. I think there was a lot of concern years ago when gm, around the time that they were coming back from bankruptcy, acquired a subprime lender and everybody said, hey, wait a minute here. Isn't this kind of what put GM in the ditch back in 2008, 2009? But really they've also turned GM Financial into a captive lender that does a lot of higher credit scores and not necessarily targeting that, that subprime segment that everybody rightfully is concerned about given the events of the last couple of months.

[Co-Host]

Stay with us. More from Bloomberg Intelligence coming up after this.

[Public Investing Representative]

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[Co-Host]

US in the stock market. Company news Target cutting some people here. Cutting some headcount in the corporate levels in the salaried levels in corporate hq. Let's see what's happening with Target and with the broader retail space in general. We can go to Jen Bartash's Senior Retail Staples and Packaged Food Analyst for Bloomberg Intelligence. So Jen, so it looks like Target is announcing some corporate job cuts. What do you make of it here?

[Jen Bartash]

Yeah hi Paul, So when we look at Target, these are corporate jobs. As you said, it's about 1800 in total from a thousand existing and 800 postings that haven't been filled. And really, this is to us signals that they're finally really looking at how to streamline the organization, tighten things up and hopefully initiate change a little bit faster than they have to kind of get things back on track.

[Co-Host]

So is this, is this an issue for the company? That is maybe they are a little bloated, maybe their profit margins aren't up to snuff. Is that something that's been identified?

[Jen Bartash]

You know, I think that the bloat is something that is, has been identified by the company and they're not alone. If you think about as we came out of the pandemic, you know, a lot of companies introduced a lot more redundancy in their processes, in their things like that, just in order to make sure that they would have enough supply of goods for everybody. And as the overall supply chain is stabilized now it's time to go back and trim that fat that they put on just after the pandemic. And, you know, again, Target's not alone. Walmart, you know, earlier this year, has also announced corporate head cuts. And so I think this is a normal course of business, but it's a good time for Target to do so.

[Co-Host]

So let's, assuming that's a, it's a due course of business here, let's step back and take a look at their core fundamentals of the business, whether it's Target or Walmart here, as we go into this holiday shopping season, what are the key drivers or the key levers that you're looking at to gauge success or maybe some challenges?

[Jen Bartash]

I think one of the things that needs to be kind of reiterated about Target's decision is that it doesn't impact the client facing part of the business. And so that won't affect their seasonal hires. It won't affect their number of employees in stores. And when you're looking at broader retail coming into that holiday season, success is really going to hinge on making sure they have enough of the inventory in stock that they've made good calls on what the items are that they're carrying, but also that customer support and experience. And so, you know, those, those are the things that we're going to be looking for as we get closer to the holiday season. And we had Mattel and we had Hasbro Report earlier this week and they didn't have great results. And, you know, part of that is reading into toy demand for the holidays and the orders that weren't actually, that didn't actually Materialize. So we'll be watching that very carefully when it comes to these retailers that really specialize in those kind of products for consumers around the holidays.

[Co-Host]

So what is Walmart, what is Target, what are they saying about the upcoming holiday season which is such an important part for the, you know, the overall retail chain?

[Jen Bartash]

Yeah, it is the, the most important part of the year for these companies. And both of, you know, both of these companies as well as others like Costco, they all say that they're well positioned for the holidays. You know, if you think about the procurement process, most of the orders for holiday goods were placed back in January or February. A lot of the goods started to arrive in July and August Forest. So they should have their goods here in the US Kind of ready to go. And so I think, but with the state of the consumer spending patterns in the U.S. although people are still spending money, they're still looking for value. So when we're looking forward to the holiday season, we think we're going to see much more spread out deals and people spending, you know, on a, on a spread out basis so that they don't get hit hard by big credit card bills in January. So watch for lots of small deals that kind of lead up into the holidays.

[Co-Host]

And will prices that we pay at the retail, at the target level, at the Walmart level, are they going to be influenced by tariffs, do we think?

[Jen Bartash]

I think there will be certain categories that will be influenced by tariffs. And so, you know, all the retailers are saying they're using price increases as the last possible resort. And I think actually one of the interesting things is that when they talk about pushing back on suppliers or sharing the cost of suppliers. Some of the commentary that we heard this week from Mattel and Hasbro sort of illustrate that, you know, there were lower orders, there's less expectation for quick refills. So it'll be interesting to see where that, you know, how effective those companies are at negotiating other ways to, to manage tariffs before they put price increases in. But in some areas it's going to be impossible not to pass something through.

[Host]

This is the Bloomberg Intelligence podcast available on Apple, Spotify and anywhere else you get your podcasts. Listen live each weekday 10am to noon eastern on bloomberg.com the iHeartRadio app tunein and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg terminal. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business from fast free shipping to in depth buying insights and automated purchase approvals. They deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to amazonbusiness.com for support.

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