Intel suffered its worst trading day in over a year Friday. Shares crashed 17% following a quarterly forecast that disappointed Wall Street. The drop marked the chipmaker’s steepest decline since August 2024.
The selloff stemmed from Intel’s first-quarter outlook. The company expects revenue between $11.7 billion and $12.7 billion. Analysts wanted $12.51 billion. Intel also guided for break-even adjusted earnings per share versus the $0.05 estimate.
Stocktwits data shows Intel sentiment has remained “extremely bullish” for two consecutive weeks. It actually ticked higher after Thursday’s earnings release. Message volume for the ticker surged 177% over the past week.
“Hold tight. Market is overreacting to the forward guidance,” one trader posted. Another forecasted a bounce to $50 followed by consolidation.
Intel did beat fourth-quarter expectations on both revenue and profit. But the weak Q1 guidance overshadowed those wins. Management confessed to botching demand forecasts for AI data center chips. The company couldn’t fulfill orders fast enough, missing out on lucrative sales.
Morgan Stanley analyst raised the firm’s Intel price target to $41 from $38. However, the Equal Weight rating stayed put. The analyst called out “meaningful supply constraints” as a red flag. These issues look especially bad as Intel tries to fix its struggling foundry operations.
Supply problems don’t help Intel win customer confidence in its ability to deliver consistent foundry services. This matters as the company battles for contract chipmaking business.
Truist Securities bumped its target to $49 from $39. RBC Capital Markets went the other direction, cutting to $48 from $50. Both firms voiced worries about the weak first-quarter outlook.
The broader analyst community isn’t enthusiastic. Of 47 analysts covering Intel, 33 rate it a hold. Only eight recommend buying. Six suggest selling. The consensus price target of $46.09 sits barely $1 above where the stock closed before the plunge.
Intel shares rocketed 84% higher in 2024. That momentum carried into January before hitting last week’s wall. Even after Friday’s crash, the stock remains up over 22% for the month.
Intel recently unveiled its Core Ultra Series 3 processors. The company has made strides in core business segments. But supply chain headaches and the guidance miss stole the spotlight.
Management’s admission about failing to meet AI data center demand stings. This segment represents one of the chip industry’s hottest growth areas. Missing sales here means leaving money on the table during a critical period.
Intel’s supply constraints won’t make foundry customers feel better about relying on the company for manufacturing needs.
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