Intel stock drops 17% as manufacturing troubles overshadow earnings

Intel Shares tumbled 17% on Friday after the chipmaker issued weak guidance and warned of supply shortages.

The stock was headed for its worst session since August 2024.

during a fourth quarter profit In a call with analysts on Thursday, CEO Lip-Bu Tan said the company could not meet all the demand for its products. He said that production efficiency, that is, return, was also below his targets.

“We are on a multi-year journey,” he said. “It will take time and it will be resolved.”

The chipmaker expects first-quarter revenue to range between $11.7 billion and $12.7 billion and adjusted earnings per share to be at breakeven. This was below LSEG’s expectations for earnings of 5 cents per share and revenue of $12.51 billion.

Intel shares have more than doubled in value in the past year on hopes that the struggling American chipmaker will rebound following investments from the US government, SoftBank and Nvidia.

The company’s foundry business has long had underperforming competitors that are profiting greatly from the AI ​​boom in the data center.

Investors were looking for clarity on foundry customers as the stock’s next booster. The company’s foundry business produces chips for other companies.

CFO David Zinsner told CNBC that Intel expects the next-generation 14A technology to be available from customers in the second half of the year.

But analysts at RBC Capital Markets warned that a “meaningful revenue contribution” from 14A customers may not emerge until late 2028.

“We appreciate the recent opportunity excitement for INTC, but we still don’t see a clear path forward given further share losses, lack of an AI strategy, and uncertain factory/packaging opportunities,” analysts at Jefferies wrote.

Despite the soft outlook, Intel beat Wall Street’s fourth-quarter earnings and revenue expectations.

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