Intel reported fourth-quarter revenue of $13.67 billion and non-GAAP EPS of $0.15, modestly topping consensus estimates. Despite this beat, management issued first-quarter guidance of $11.7 billion to $12.7 billion in revenue—below the Street’s roughly $12.6 billion forecast—and flat to negligible EPS growth. The weaker outlook follows a nearly 20% one-day stock drop last Friday and contributed to Monday’s 5.7% decline, even as broader markets gained ground.

CFO David Zinsner warned that Intel is operating at near-full utilization and still cannot meet current chip demand, attributing future sales and earnings pressure to “acute internal supply constraints.” Yield challenges on advanced fabrication nodes have forced the company to defer capacity expansion on its next-generation 14A process until firm customer commitments arrive. As a result, Intel expects supply to remain tight through the first half of the year, limiting its ability to capitalize on robust market demand for AI and data-center processors.

Despite the supply squeeze, Intel’s Data Center and AI (DCAI) segment delivered 15% sequential revenue growth in Q4, reflecting healthy enterprise and cloud uptake of its latest Xeon processors. However, management cautioned that year-over-year declines in both segment revenue and gross margin are likely to persist into Q1, with a bumpy recovery anticipated in the second quarter as capacity ramps and internal yields improve. Long-term investors remain focused on Intel’s push into AI-optimized silicon and foundry services as potential drivers of future upside.