Intel Corporation, a leading semiconductor manufacturer, released its earnings for the fourth quarter, delivering a mixed financial report. The company exceeded profit projections but warned of a subdued near-term revenue trajectory, resulting in a notable selloff in its stock.
Specifically, Intel recorded revenue of $13.67 billion during the quarter, surpassing the consensus estimate of $13.37 billion. Adjusted earnings per share came in at 15 cents, well above the anticipated eight cents. Despite the revenue beat, this figure represented a 4% decline compared with the same period last year. The revenue contraction masked divergent trends within Intel’s business units: gains in the Data Center and Artificial Intelligence (AI) sectors partially compensated for reductions in the Client Computing Group.
Looking ahead, Intel projected first-quarter revenue between $11.7 billion and $12.7 billion, falling short of the $12.49 billion estimate from industry analysts. The company also forecast breakeven adjusted earnings per share for the upcoming quarter, which contrasts with market expectations of modest profitability.
Several equity analysts have highlighted ongoing operational constraints influencing Intel’s recent performance and guidance.
Needham & Company’s analyst N. Quinn Bolton retained a Hold recommendation on Intel stock. Bolton emphasized that despite the company outperforming in the fourth-quarter results, its forward guidance disappointed by falling below both his and consensus estimates. He attributed these challenges primarily to a persistent shortage in chip supply, notably on Intel’s 10-nanometer and 7-nanometer process nodes, which account for a significant portion of production capacity. Bolton further noted that the midpoint of Intel’s adjusted gross margin guidance stood at 34.5%, impacted by a product mix weighted towards Panther Lake, which exerts downward pressure on overall profitability. He anticipates supply shortages to reach their peak in the first quarter and to diminish gradually thereafter. Additionally, Intel’s strategic decision to allocate wafer capacity preferentially to its server products is expected to disproportionately affect revenue declines in the Client Computing division compared to the Data Center and AI units.
Benchmark analyst Cody Acree upheld a Buy rating and raised his price target for Intel shares from $50 to $57. Acree viewed the recent stock price decline as a correction following a robust rally, underpinned by conservative guidance amid solid quarterly results. He described Intel as undergoing a significant transformation, referencing milestones such as the 18A process technology breakthrough and the launch of the early Core Ultra Series 3 processors as indicators of advancing execution capabilities. Acree identified 2026 as a pivotal year to demonstrate manufacturing efficiencies, while cautioning about sustained margin pressures due to the 18A process ramp-up and component cost dynamics.
Analyst Harlan Sur of JP Morgan maintained an Underweight rating but increased his target price from $30 to $35. Sur linked the weaker guidance to enduring constraints on internal wafer capacity, especially on Intel’s 10 and 7-nanometer lines. He observed a disappointing gross margin outlook resulting from lower revenue expectations coupled with an adverse product mix, particularly as Lunar Lake and Panther Lake products continue to dilute margins. Sur also noted Intel is streamlining its server roadmap and accelerating product introductions to mitigate market share losses to rival Advanced Micro Devices, Inc. (AMD), while strong demand for traditional server CPUs driven by AI inference workloads remains supportive. JPMorgan’s research team projects approximately a 9% decline in global PC shipments next year but anticipates that Intel’s revenue should experience low- to mid-single-digit growth anchored by Data Center and AI demand.
Intel’s market performance reflected investor concerns following the earnings release and accompanying guidance. On Friday, shares declined sharply by approximately 15.7%, settling near $45.78 at the time of data capture. This price movement mirrors sentiment around the risks posed by supply limitations and margin dilution despite operational advances and revenue beats in specific segments.
In summary, Intel’s fourth-quarter financial disclosure illuminated the complexities of its ongoing turnaround. While the company beat revenue and earnings expectations, its projected near-term results underwhelmed markets. Analysts remain divided in outlook, balancing supply bottlenecks and margin headwinds against progress in strategic technology deployments and product launches. The evolution of Intel’s manufacturing capabilities and ability to navigate capacity constraints will likely be pivotal factors shaping investor confidence in the coming quarters.