Intel (INTC) Stock: Supply Problems Crush Shares Despite Revenue Beat

TLDR

• Intel stock dropped 13% after-hours following weak Q1 guidance despite beating Q4 earnings expectations
• The company cannot meet demand for AI data center server chips due to supply constraints and manufacturing yield issues
• First-quarter revenue guidance of $11.7-12.7 billion missed analyst estimates of $12.51 billion
• CEO Lip-Bu Tan said 18A manufacturing yields are below target, limiting supply of new products
• Intel completed a $5 billion stock sale to Nvidia during the quarter and reported $4.5 billion in foundry revenue

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Intel reported fourth-quarter earnings that beat Wall Street expectations but shares tumbled 13% in after-hours trading Thursday. The problem wasn’t the past quarter. It was what comes next.

The chipmaker posted adjusted earnings of 15 cents per share on revenue of $13.7 billion. Both numbers topped analyst estimates. But investors quickly shifted focus to the company’s outlook.

Intel guided for first-quarter revenue between $11.7 billion and $12.7 billion. Analysts wanted $12.51 billion. The company expects breakeven earnings per share versus expectations of 5 cents.

Intel Corporation, INTC

The weak guidance stems from supply problems. Finance chief David Zinsner told CNBC the company lacks the supply needed to meet seasonal demand. He said supply would improve in the second quarter.

Intel faces a strange problem for a struggling company. It can’t make enough chips to meet demand. The issue centers on server processors used in AI data centers alongside Nvidia GPUs.

Manufacturing Challenges Hit Supply

The supply crunch hits hardest with Intel’s 18A manufacturing technology. The company started shipping Panther Lake PC chips made with 18A. But yields remain problematic.

Reuters previously reported that only a small percentage of chips printed via 18A meet quality standards. Weak yields pressure profit margins. Tan said yields improve monthly but haven’t reached acceptable levels.

Data Center and AI sales totaled $4.7 billion during the quarter, up 9% year-over-year. Client Computing Group sales dropped 7% to $8.2 billion as laptop demand weakened.

Intel reported a net loss of $600 million, or 12 cents per diluted share. That compared to a $100 million loss in the year-ago period.

Looking Ahead to 14A Technology

Zinsner said Intel hasn’t invested heavily in its next-generation 14A manufacturing process while waiting for a large customer commitment. Two customers are currently evaluating the technology’s technical details.

The company expects to know by the second half of this year whether external customers will use 14A. Investors can watch for spikes in capital spending as a signal of new customer wins.

Intel’s foundry business generated $4.5 billion in revenue during the quarter. Some of that came from making the company’s own chips. Tan said Intel works aggressively to increase 18A supply to meet customer demand.

The company completed its $5 billion stock sale to Nvidia during the quarter. SoftBank invested $2 billion and the U.S. government also took a stake last year.

Zinsner told Reuters that cloud computing giants were caught off guard by AI demand. They had to scramble to upgrade aging chip fleets due to networking performance issues. Intel faces lag time in changing the types of chips it makes.

A global memory chip shortage boosted prices and made personal computers more expensive. Zinsner said available supply would hit its lowest levels in the first quarter before improving in the second quarter.

Intel stock rose 147% over the past year on optimism about the foundry business and new manufacturing technology. The shares gained 84% in 2025 alone, outperforming the benchmark semiconductor index’s 42% rise.

Zinsner told CNBC that Intel expects capital expenditure to stay steady versus previous expectations for a decline.

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