Better-than-feared results and rising AI demand support Intel’s narrative, even as near-term pressure builds on margins.
Intel (INTC) shares slid as much as 5% in after-hours trading Thursday after the company’s first-quarter outlook came in below Wall Street expectations, tempering recent enthusiasm around its turnaround story. Intel guided to first-quarter revenue of $12.2 billion at the midpoint, missing the $12.6 billion consensus estimate, and projected earnings per share of $0, below the $0.08 analysts expected.
The weaker guidance overshadowed a stronger-than-anticipated fourth quarter report. Intel posted earnings per share of $0.15, topping both last year’s $0.13 and the $0.09 consensus forecast. Revenue came in at $13.7 billion—down 4% from a year earlier, but ahead of the $13.4 billion expected—showing signs of stabilization in its core business despite an increasingly competitive landscape.
CEO Lip-Bu Tan emphasized that Intel’s role in powering the next phase of artificial intelligence remains central, pointing to rising demand for CPUs across modern computing. “Our conviction in the essential role of CPUs in the AI era continues to grow,” Tan said, adding that Intel is focused on improving execution, restoring engineering strength, and capturing AI opportunities across its portfolio.
Intel’s rebound has gained momentum in recent weeks as investors priced in improving demand from data centers and renewed excitement around upcoming products like the Panther Lake chips for AI PCs. That optimism helped drive the stock up nearly 12% this month and to its highest level in four years before Thursday’s pullback.
Still, risks remain. Intel’s manufacturing roadmap—especially the costly development of 18A and future process nodes—continues to pressure profitability. Adjusted gross margin fell to 37.9% in the fourth quarter from 42.1% a year ago, though it landed above expectations. Intel also warned that higher memory and storage component costs could weigh on demand for systems built around its processors.
CFO David Zinsner noted Intel exceeded fourth-quarter expectations while navigating industry-wide supply shortages, but the next quarter will test whether momentum can translate into sustained growth.
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