Intel shares fall 12% after disappointing Q1 2026 forecast
Intel shares (INTC) fell 12% in after-hours trading on Thursday following the release of the company’s fourth-quarter 2025 earnings and its outlook for the first quarter of 2026, as Wall Street reacted negatively to weaker-than-expected guidance from the U.S. government-backed chipmaker amid ongoing component shortages.
The semiconductor manufacturer said it expects first-quarter revenue of $12.2 billion, the midpoint of its forecast range and below the $12.6 billion expected by Wall Street analysts tracked by Bloomberg. Intel also forecast zero earnings per share for the period, compared with analysts’ expectations of $0.08.
“Our main near-term challenge is that we cannot meet all customer demand,” Intel Vice President of Investor Relations John Pitzer told Yahoo Finance, adding that the company is actively working to expand production capacity.
Meanwhile, Intel’s fourth-quarter earnings and revenue exceeded expectations, signaling growing demand for artificial intelligence–related computing chips, particularly central processing units (CPUs).
Intel reported earnings per share of $0.15 for the quarter, slightly above last year’s $0.13 and ahead of the $0.09 consensus estimate, according to Bloomberg data. Fourth-quarter revenue came in at $13.7 billion, down 4% year over year but above the expected $13.4 billion.
Competitive and cost pressures
One of Intel’s near-term challenges is the high cost of ramping up its 18A manufacturing process and subsequent nodes, which is expected to weigh on gross margins.
Another concern is rising costs for memory and storage components used alongside Intel processors in data center servers and PCs, which could reduce demand for Intel-based systems and pressure profitability.
However, growing demand for Intel’s traditional computing chips from data centers and the upcoming launch of Intel’s Panther Lake chips for AI-powered PCs have prompted several investment firms, including HSBC and KeyBanc, to upgrade Intel’s stock in recent weeks. These moves helped drive nearly a 50% rally in Intel shares this month, making the latest decline appear more like a necessary correction.
As we wrote, Intel stock drops 3.23% after volatile session despite bullish technical setup
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