Intel reported fourth-quarter revenue of $13.67 billion, topping consensus estimates by roughly $300 million, and non-GAAP earnings of $0.15 per share. Despite the beat, management guided first-quarter revenue between $11.7 billion and $12.7 billion, falling below the Street’s $12.6 billion expectation, and projected flat to modestly positive earnings. Investors punished the disparity, sending shares down 5.7% on the trading day, even as broader markets rose marginally. The stock’s decline followed a 20% drop on Friday after similar forward targets disappointed analysts.

CFO David Zinsner warned that Intel is operating near full capacity but lacks the internal supply to meet surging demand for server CPUs and AI accelerators. Persistent yield issues on advanced nodes have delayed volume ramps, and tool delivery backlogs limit wafer starts. With gross margin at 34.8% in Q4, investors worry that constrained production could pressure both top-line growth and profitability over the next two quarters.

Intense competition from TSMC-built AMD and Nvidia accelerators has intensified as hyperscale customers scramble for foundry capacity. Intel’s internal manufacturing shortfall risks ceding share in the data center market, where its DCAI segment had grown just 15% sequentially in Q4—well below the 25–30% gains seen by rival GPU vendors. Analysts note that unless supply constraints ease by mid-year, Intel may struggle to capitalize on the broader AI infrastructure build-out.

Despite near-term headwinds, management reiterated its multi-year turnaround plan centered on ramping Intel 18A and prioritizing custom ASICs, which grew 50% in 2025 to an annualized $1 billion run rate. CEO Pat Gelsinger emphasized ongoing capital investments in Intel 18A and 14A processes, forecasting that customer commitments for next-generation nodes will materialize in the second half of 2026. Long-term bulls argue that the current pullback offers an entry point ahead of an expected supply recovery in Q3.