Intel has projected revenue between $11.7 billion and $12.7 billion for the first quarter of 2026, which is below Wall Street forecasts. This announcement has led to a significant drop in the company's stock during after-hours trading, reflecting persistent challenges the chipmaker faces in its recovery efforts. The forecast comes at a crucial time as Intel aims to stabilize its operations and adapt to the fast-changing landscape of the AI chip market.
Despite a strong performance in 2025, where shares rose 84% following a decline of over 60% in 2024, analysts had expected a more robust rebound driven by improved product strategies and strategic partnerships. However, recent warnings have diminished that optimism, as demand for server CPUs, essential for AI expansions, has surged unexpectedly.
Intel's Chief Executive, Lip-Bu Tan, acknowledged challenges in meeting this demand, leading to adjusted earnings per share likely near break-even. Chief Financial Officer David Zinsner mentioned that the company was "caught off guard" by a drop in networking performance, which requires urgent upgrades. With factories at full capacity, shifting resources to meet the rising demand for data-center products will be a lengthy process.
Additionally, Intel is launching its new "Panther Lake" PC chips, the first to implement the 18A manufacturing technology. While yields are reportedly improving, inconsistencies are still affecting profit margins, complicating the company's operational strategy.