Why Intel Shares Tumbled 16% After Solid Earnings

Intel Corporation (NASDAQ: INTC) released its fourth quarter results for 2025, and while the numbers topped what analysts predicted, the stock in early trading today was down more than 16%. This reaction shows how markets often fixate on what comes next rather than what just happened. Investors shrugged off the actual performance and zeroed in on the company’s outlook for the first quarter of 2026, which fell short of hopes. 

The company posted adjusted earnings per share of $0.15, well above the $0.08 that analysts from LSEG expected. Revenue hit $13.7 billion, topping the $13.4 billion forecast from the same survey. These figures mark a clear win against lowered expectations heading into the report. On a GAAP basis, Intel reported a net loss of $600 million, or $0.12 per diluted share, compared to a $100 million loss, or $0.03 per share, in the same quarter a year earlier. That wider loss reflects ongoing costs in areas like the foundry business, but the adjusted metrics grabbed the spotlight. Full year revenue came in flat at $52.9 billion, down slightly from 2024 after adjusting for certain business changes. 

Intel guided for first quarter revenue between $11.7 billion and $12.7 billion, with adjusted earnings per share at breakeven. Analysts had penciled in around $12.5 billion in sales and $0.05 per share. This conservative view stems from supply constraints that limit the company’s ability to meet demand, especially for AI related products. Chief Financial Officer David Zinsner noted that seasonal demand outpaced supply, though improvements should come by the second quarter. CEO Lip-Bu Tan added that manufacturing yields, a key measure of production efficiency, sit below his targets. Investors see this as a sign Intel struggles to keep up in the hot AI chip market, where rivals like Nvidia grab bigger shares. 

The stock dropped over 13% in after hours trading and held most of that loss at the open, wiping out recent gains. Despite a 147% run over the past year on AI optimism, this miss on guidance triggered profit taking. Traders bet on Intel landing major foundry deals or ramping AI server chips, but soft numbers suggest delays. Data center and AI sales rose 9% year over year to $4.7 billion, a bright spot, while client computing fell 7% to $8.2 billion amid weak PC demand. The foundry unit, meant to compete with Taiwan Semiconductor, posted $4 billion but includes internal production, raising questions on external growth. 

Markets price in future cash flows, so a strong quarter means little if the next one looks shaky. Intel’s history of missing on ambitious goals has burned investors before, making them quick to sell on any whiff of trouble. Government investments and sales to players like Nvidia helped in 2025, but execution risks dominate now. Supply fixes and yield gains could turn this around, yet the market demands proof soon. For business readers new to semis, think of it this way: beating last quarters test feels good, but hinting at a stumble next quarter sends everyone running.