New York, Jan 23, 2026, 13:49 EST — Regular session
Shares of Intel (INTC) fell 17.3% to $44.94 in early afternoon trading Friday after the company issued a weak first-quarter outlook, raising doubts about its ability to capitalize on the AI data-center surge.
Intel’s fall came after a strong run that saw shares jump almost 50% from the start of January through Thursday’s close. The sharp gain now looks vulnerable if investors start doubting the pace of the turnaround behind the rally. 1
This comes at a sensitive point in the calendar. U.S. earnings season is underway, with a key question being whether firms are finally seeing returns from hefty AI investments, after skepticism late last year hit certain tech stocks. 2
Intel reported fourth-quarter revenue of $13.7 billion late Thursday, with adjusted earnings coming in at 15 cents per share. The company expects first-quarter revenue between $11.7 billion and $12.7 billion, forecasting a break-even adjusted profit — “adjusted” excludes certain items. It projected an adjusted gross margin of 34.5%. CEO Lip-Bu Tan said Intel is “working aggressively to grow supply” as it advances its 18A manufacturing process. 3
Intel revealed its results and outlook in an 8-K filing with the U.S. Securities and Exchange Commission, including the earnings release and reconciliations for the adjusted metrics it used in its guidance. 4
Intel told investors that supply constraints have left it unable to meet AI-driven demand for data-center processors, despite running its factories at full tilt. Traders, who had bet on the stock’s rebound, were rattled. TD Cowen analysts said, “The rally had been largely driven by the dream.” Bernstein added that Intel had “woefully misjudged” its capacity footprint as the server cycle shifted. Jefferies and Oppenheimer pointed to March and Q2 as possible turning points for easing bottlenecks. Meanwhile, Tan noted that two potential foundry customers remain in the technical evaluation phase of Intel’s upcoming 14A process—no contracts signed yet. 5
The chip sector’s shake-up sent the Dow tumbling around 0.8%, with the S&P 500 holding steady and the Nasdaq-100 edging up about 0.4%. Nvidia and AMD each climbed roughly 1.5%, yet the iShares Semiconductor ETF dropped close to 1.5%.
Tan zeroed in on execution during the earnings call. He reported Intel is achieving “7%, 8% yield improvement per month”—yield here meaning the percentage of usable chips from each silicon wafer—but flagged ongoing issues with consistency and defect density, factors that can weigh on margins. 6
Still, the company’s own words highlighted the immediate challenges. “In the short term, I’m disappointed that we are not able to fully meet the demand in our markets,” Tan told analysts. CFO David Zinsner added that large cloud customers were “a little bit caught off guard” by how quickly upgrades were rolling out. Running Point Capital CIO Michael Schulman was more direct: Intel’s “turnaround story remains supply-constrained rather than demand-constrained.” 7
The downside scenario is pretty straightforward. Barron’s reported that management expects supply to get better later this year but cautioned that rising memory-chip prices might hit PC demand—an issue if the supply crunch persists or margins remain squeezed longer than investors anticipate. 8
Traders are now focused on the Federal Reserve’s policy meeting scheduled for Jan. 27-28. Chair Jerome Powell will deliver remarks following the announcement on Jan. 28 — a key moment to gauge interest rates, risk appetite, and how markets handle disappointing forecasts from major tech firms. 9
