Intel (INTC) stock rose nearly 50% in the month leading up to the chipmaker’s fourth quarter report as hopes had grown for the Silicon Valley icon to make a comeback.
But the stock tumbled more than 17% Friday as investors were reminded that its road to recovery is far from linear.
Recent support in 2025 in the form of investments from the US government and Nvidia (NVDA) sent Intel shares soaring in recent months. And three big catalysts helped send Intel shares to their highest level in four years earlier this week: A supportive social media post from President Trump, growing Wall Street optimism over demand for traditional computing chips from AI data centers, and the release of Intel’s Panther Lake chips made with its latest 18A manufacturing process.
“It almost turned into a meme stock for a bit,” Bernstein analyst Stacy Rasgon told Yahoo Finance in an interview. “A run like that where it goes vertical into earnings — you better have a perfect print.”
But Intel’s financial results weren’t perfect. While Intel’s fourth quarter results exceeded expectations, its first quarter earnings and revenue forecasts were softer than projected. The chipmaker is struggling to meet demand for its server chips due to internal supply constraints. Rasgon said the supply shortages, which stem from Intel’s own factories, point to two issues: The company may be struggling to utilize its manufacturing tools efficiently, and it may have underestimated the scale of AI data center demand for its server CPUs (central processing units).
Intel CEO Lip-Bu Tan said on a call with analysts Thursday that the company is “working tirelessly to drive efficiency and more output” from its manufacturing plants.
But Friday’s stock plunge revealed what Rasgon called the “huge disconnect” between the stock’s hype over the past month and Intel’s near-term reality.
Intel’s product business, which designs CPUs for computers and data center servers, is forfeiting market share to rival chipmakers AMD (AMD) and Arm (ARM). That loss makes it difficult to justify the cost of operating Intel’s manufacturing segment without a substantial external customer, which it lacks thus far despite rumors of two deals with Apple (AAPL). As Intel works to catch up in the space by introducing new manufacturing processes — following years of delays and missteps — its higher expenditures are set to weigh on profits.
The near-term execution issues seen in Intel’s first quarter don’t bode well for its ability to win outside customers and catch up to manufacturing rival TSMC (TSM).
“Intel stock has been difficult because it’s not a clean story,” HSBC analyst Frank Lee told Yahoo Finance, noting that turning around the foundry will take a long time.
Intel said it should announce customers for its upcoming manufacturing process, 14A — which has been developed with the hopes of drawing in big deals — during the second half of 2026 or the first half of 2027. Even so, Lee noted that revenue from those deals wouldn’t show up in its financial statements until 2028 or 2029.
Rasgon’s assessment yields the same takeaway: “It’s not something that gets fixed in a quarter or two,” he said of the manufacturing business’s attempts to right the ship.
“It’s probably gonna take 10 years to fix it.”
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance