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☕ TL;DR

  • Earnings Beat: Q4 Revenue ($13.7B) and EPS ($0.15) topped analyst estimates.
  • Guidance Miss: Q1 outlook fell short due to supply constraints, sending shares down 13%.
  • Tech Progress: CEO claims 18A process node “over-delivered” in 2025.

The Scoop: Improving Fundamentals vs. Reality Check 📉

Intel (INTC) delivered a Q4 report that initially looked like a victory lap. Revenue came in at $13.7 billion (vs. $13.4 billion expected), and adjusted EPS hit 15 cents (vs. 8 cents expected).

However, the market looked forward, not backward. The stock plunged 13% in after-hours trading after management issued soft Q1 guidance. Intel projects Q1 revenue between $11.7B and $12.7B, missing the midpoint consensus of $12.51B. Even worse, the EPS outlook is essentially breakeven, well below the 5-cent expectation.

CFO David Zinsner cited supply shortages rather than demand issues as the primary culprit, promising improvement by Q2.

Why It Matters: The Turnaround Story

The narrative for Intel remains centered on two pillars: AI Growth and Foundry Execution.

1. AI & Data Center Momentum

  • Data Center and AI (DCAI) revenue grew 9% YoY to $4.7 billion. While positive, this growth rate still lags behind the explosive numbers seen from Nvidia or even AMD in the server space. Intel needs to prove its CPU/GPU offerings are essential for the AI era, not just legacy infrastructure.

2. The 18A Promise Key

CEO Lip-Bu Tan made a bold claim regarding their manufacturing roadmap: the 18A process node “over-delivered” in 2025.

  • Context: 18A is Intel’s answer to TSMC’s 2nm dominance.
  • Implication: If true, Intel could regain process leadership or at least parity. This is critical for attracting external foundry customers.

3. Financial Cleanup

The completed $5 billion stock sale to Nvidia and investments from SoftBank/US Government have burnished the balance sheet. However, the $600 million net loss in Q4 indicates that operational efficiency is still a work in progress.

The Verdict: Wait for Execution 🛑

My Posture: Neutral / Watch

Intel is a classic “show me” story. The 13% drop reflects frustration with yet another quarter of “jam tomorrow” promises. While the 18A progress is encouraging, the supply constraints in Q1 suggest that execution risks remain high.

  • Bull Case: 18A success leads to major foundry customer wins in 2H 2026.
  • Bear Case: Supply issues persist, and Data Center share continues to bleed to AMD/Arm.

Until we see concrete announcements of external customers for 18A (beyond strategic partners), capital allocation should favor proven foundry leaders (TSMC) or AI pure-plays.

Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investment decisions should be made based on your own judgment and responsibility.