A leading semiconductor analyst has downgraded Intel to a sell, noting that the company’s turnaround appears to have lost momentum. In the fourth quarter, Intel reported revenue of $13.67 billion, a 4% year-over-year decline, while non-GAAP gross margins contracted by approximately 180 basis points. Management’s guidance for the first quarter calls for further revenue pressure, with flat to low-single-digit percentage declines expected sequentially. The downgrade firm’s valuation model indicates that Intel’s shares currently price in an aggressive rebound—projecting mid-cycle margins above 50%—despite the softer fundamentals and continued supply chain challenges.

At the recent Cisco AI Summit, CEO Lip-Bu Tan confirmed that Intel will begin producing graphics processing units, an area long dominated by a key rival. The GPU initiative is overseen by Kevork Kechichian, Intel’s data center general manager, and supported by new hire Eric Demmers, formerly a senior engineering vice president at Qualcomm. While details remain sparse, management has indicated that the program will evolve based on enterprise customer feedback, with initial focus on AI training workloads and high-performance computing applications.

Intel’s foundry segment has attracted significant capital commitments, including over $20 billion in U.S. government incentives and strategic investments from technology partners. Despite this, the unit has yet to secure a marquee external customer contract, limiting near-term revenue visibility. Production ramp delays on the 18A process node have also constrained capacity conversion, with management now targeting volume production in the second half of 2026. Investors are closely watching progress on 14A and 18A to validate the company’s goal of challenging pure-play foundries on cost and technology leadership.