05:04 PM EDT, 10/23/2025 (MT Newswires) -- Intel ( INTC ) turned a profit in the third quarter as revenue unexpectedly rose, thanks to artificial intelligence boosting demand for computing power.

The chipmaker reported adjusted earnings of $0.23 per share during the quarter ended Sept. 27 versus a loss of $0.46 a year earlier. The FactSet-polled consensus was for non-GAAP EPS of $0.02. Revenue rose 3% to $13.65 billion, compared with expectations for a drop to $13.17 billion.

The stock was up 6.2% in after-hours trading.

"AI is accelerating demand for compute and creating attractive opportunities across our portfolio," Chief Executive Lip-Bu Tan said in a statement.

Demand is outpacing supply, a trend likely to continue into 2026, Chief Financial Officer David Zinsner said. Sales within the client computing segment rose 5% to $8.53 billion, while its foundry business fell 2% to $4.24 billion.

The US government earlier this year agreed to invest $8.9 billion in Intel's ( INTC ) common stock as part of a deal to secure a 9.9% stake in the chipmaker. Last month, Nvidia ( NVDA ) said it will invest $5 billion in Intel ( INTC ) under a collaboration that aims to develop new data center and personal computer chips.

Japan's SoftBank Group agreed in August to make a $2 billion investment in Intel ( INTC ).

These deals "increase our operational flexibility and demonstrate the critical role we play in the ecosystem," Zinsner said.

BofA said last week that the Nvidia ( NVDA ) partnership improves Intel's ( INTC ) enterprise AI positioning, "but lack of an accelerator product keeps upside limited."

The brokerage downgraded Intel's ( INTC ) stock to underperform from neutral, saying the chipmaker continues to struggle gaining market share from Advanced Micro Devices ( AMD ) and Arm Holdings ( ARM ) in both PC and server central processing units.

Intel's ( INTC ) "competitive outlook remains challenged with no discernible AI portfolio/strategy, uncompetitive server CPU, and less flexibility now (versus) before in divesting loss-making manufacturing," BofA said.

For the current quarter, Intel ( INTC ) expects adjusted EPS of $0.08, while analysts were looking for $0.10. Revenue is pegged at $12.8 billion to $13.8 billion, versus the Street's estimate of $13.42 billion.

The company said in July that it won't proceed with planned projects in Germany and Poland and that it would slow down the pace of construction in Ohio to align spending with demand.