Intel Stock Drops Following Weak First-Quarter Outlook

• Intel's foundry business generated $4.5 billion in revenue, with CEO Lip-Bu Tan citing 'strong customer demand' for the company's 18A technology that competes with TSMC's 2nm process
• Data Center and AI sales reached $4.7 billion, up 9% year-over-year, driven by increased spending on AI infrastructure and strong server chip sales
• Client Computing Group (laptops) sales declined 7% year-over-year to $8.2 billion, while the stock has risen 147% over the past year on foundry business optimism

Summary: Intel Stock Declines Despite Q4 Earnings Beat

Key Financial Results:

Intel reported fourth-quarter earnings that exceeded Wall Street expectations, with adjusted EPS of 15 cents (vs. 8 cents estimated) and revenue of $13.7 billion (vs. $13.4 billion estimated). However, the company posted a net loss of $600 million, or 12 cents per diluted share.

Weak Q1 Guidance Triggers Sell-Off:

The stock declined following soft first-quarter guidance, with expected revenue between $11.7 billion and $12.7 billion. This disappointing outlook overshadowed the Q4 beat.

Business Segment Performance:

• Data Center and AI: $4.7 billion in revenue, up 9% year-over-year, driven by increased AI infrastructure spending
• Client Computing (laptops): $8.2 billion, down 7% year-over-year
• Foundry Business: $4.5 billion in revenue (includes Intel's own chip production)

Strategic Developments:

CEO Lip-Bu Tan highlighted the company's 18A manufacturing technology, which achieved "production release" last year and competes with TSMC's 2nm technology. Intel is "working aggressively" to increase 18A supply amid strong customer demand. CFO David Zinsner indicated customers for next-generation 14A technology would emerge in the second half of 2025.

Market Context:

Despite the decline, Intel stock has surged 147% over the past year, fueled by optimism around securing major foundry customers and strong server chip sales. Recent investments from the U.S. government, SoftBank, and Nvidia have made them significant shareholders, reflecting confidence in Intel's turnaround strategy.

The mixed results highlight Intel's ongoing transition challenges while demonstrating progress in strategic growth areas.