Intel Shares Plunge as Supply Constraints Undercut Strong Results

A significant supply chain bottleneck is hampering Intel's ability to capitalize on the artificial intelligence boom, casting a dark shadow over an otherwise positive quarterly earnings report. The chipmaker's shares plummeted 17% on Friday following the release of its financial figures, a stark reaction driven by a deeply disappointing forecast.

After markets closed on Thursday, Intel reported fourth-quarter 2025 revenue of $13.7 billion and earnings per share (EPS) of $0.15. Both metrics surpassed analyst consensus estimates, which had called for $13.4 billion in revenue and $0.08 EPS. The company also noted sequential growth within its data center and AI business segments.

The outlook for the current period, however, triggered a sell-off. For the first quarter of 2026, Intel provided revenue guidance in a range of $11.7 billion to $12.7 billion. The midpoint of this range falls below the market consensus estimate of $12.5 billion. More strikingly, the company projected EPS of precisely $0.00, far under the $0.05 analysts had anticipated.

Chief Financial Officer David Zinsner identified severe supply shortages as the primary culprit. He stated that Intel is currently unable to meet robust demand for its server chips destined for AI data centers. These supply issues are expected to reach their most acute point in Q1 2026 before beginning to improve in the second quarter.

Should investors sell immediately? Or is it worth buying Intel?

Competitive Landscape and Strategic Context

The weak forecast raises immediate questions about Intel's competitive positioning. Rivals like Nvidia are capturing the benefits of soaring AI investment, while Intel contends with internal manufacturing hurdles. The precipitous Friday drop followed a remarkable rally; the stock had surged 47% in January 2026 alone ahead of the earnings report. That earlier optimism was fueled by confidence in CEO Lip-Bu Tan's turnaround strategy and advancements in next-generation manufacturing processes, such as the 18A node.

A significant positive development remains a major contract award from the U.S. Department of Defense, announced on January 20. Intel secured a framework agreement under the SHIELD program with a potential value of up to $151 billion.

Path Forward and Key Milestones

Intel's ability to resolve its supply challenges as promised in Q2 is now viewed as a critical determinant for its stock performance. The company has also scheduled an Analyst Day for the second half of the year, where it may introduce new external foundry customers. On the product front, the consumer CPU "Nova Lake" is slated for launch in late 2026 as the first consumer chip built on the 18A process. Investors will be watching for the next quarterly report, expected between April 23 and 27, 2026, for signs of progress.