Intel Shares Decline Amid Weak Q1 Forecast Despite Q4 Earnings Beat

Intel Corporation's stock experienced a significant decline, dropping over 16% to close at $45.07 on January 23, following the release of its fourth-quarter 2025 financial results.

In the fourth quarter, Intel reported revenue of $13.7 billion, a 4% decrease year-over-year, but surpassing analyst expectations of $13.4 billion. Adjusted earnings per share stood at $0.15, exceeding the anticipated $0.08.

However, the company's first-quarter 2026 guidance projected revenue between $11.7 billion and $12.7 billion, with breakeven adjusted earnings per share, falling short of consensus forecasts of $12.51 billion in revenue and $0.05 earnings per share.

Chief Financial Officer David Zinsner attributed the subdued outlook to supply constraints affecting the company's ability to meet seasonal demand, noting that supply is expected to improve in the second quarter.

Wedbush analyst Matt Bryson maintained a 'Neutral' rating on Intel with a $30 price target, expressing concerns over ongoing supply limitations and early-stage yields of the 18A process technology.

Despite recent stock gains, Bryson remarked, "We struggle to support current valuations, given the seemingly long road ahead to building earnings power."

Intel's stock has more than doubled over the past 12 months, reflecting investor optimism about the company's turnaround efforts under CEO Lip-Bu Tan, who assumed leadership in March 2025.

The U.S. government has become a key supporter of Intel, investing $8.9 billion last year, making it the company's largest shareholder.

Additionally, Nvidia invested $5 billion in Intel, with both companies co-developing custom data center CPUs.

Intel has begun shipping its new 'Panther Lake' PC chips, manufactured using the 18A process technology, comparable to Taiwan Semiconductor's 2-nanometer process.

CEO Lip-Bu Tan acknowledged that while yields are improving by 7% to 8% per month, they remain below desired levels.

The stock's recent decline reflects investor concerns over the company's near-term challenges, despite progress in its strategic initiatives.