Struggling Intel Faces Tumultuous Times: Company Braces for Potential Red Ink
Stock prices for Intel have taken a plunge, reflecting a downturn in the company's performance.
The tech industry is feeling the strain as U.S. chipmaker Intel grapples with slumping sales. After sharing disappointing quarterly results and a dismal outlook, Intel's stock took a hit, falling by 7% in post-market New York trading, and continuing to slide on Tradegate, down 9%. Many analysts have adjusted their forecasts accordingly.
In Q4, revenue plummeted by 32% to $14.0 billion, and adjusted earnings per share slipped to $0.10. The company fell short of analyst predictions, who anticipated $14.5 billion in revenue and earnings of $0.20 per share. Compared to the previous year, revenue decreased by 28%.
The forecast for the first quarter isn't promising either. Intel expects revenue to range between $10.5 billion and $11.5 billion - way below the anticipated $13.9 billion. Instead of the predicted adjusted earnings of $0.24 per share in the first quarter, the company now expects a loss of $0.15.
Intel CEO Pat Gelsinger shared with Reuters that he anticipates one of the largest inventory write-offs the industry has ever seen, which has a significant impact on expectations for the current quarter.
Analysts at Bank of America reduced their price target from $28 to $25, and JP Morgan followed suit, lowering its target from $32 to $28.
Börse Online downgraded Intel's title to "Watch" back in August and continues to show preference for competitor AMD.
Despite these challenges, there are some positive signs. Intel's shares rose to $20.62 (May 2, 2025) based on optimism about cost discipline and quantum encryption partnerships. The company's focus on emerging tech like AI and quantum, and its customer-centric approach, signal a shift in strategy to recoup lost market share in cloud and edge computing.
Although Intel's restructuring shows some promise, macroeconomic headwinds and execution risks related to process-node advancements are critical factors to monitor. The company's ability to navigate these challenges will be crucial in determining its future success.
- The finance division of Intel expects a loss of $0.15 per share in Q1 due to downgraded earnings, as shared by the company's CEO, Pat Gelsinger.
- In light of Intel's slipping earnings and dismal outlook, analysts at both Bank of America and JP Morgan have downgraded their price targets, BofA from $28 to $25, and JP Morgan from $32 to $28.
- Despite the challenges ahead for Intel, including macroeconomic headwinds and process-node advancement execution risks, the company is focusing on emerging tech like AI and quantum, and a customer-centric approach, which signals a shift in strategy to recoup lost market share in cloud and edge computing.
