Intel Plunges 17% in Worst Day Since 2024
Supply constraints and weak guidance trigger massive selloff as CEO Tan warns turnaround will take time. Trading volume hits 290 million shares.
Intel had its worst day in two years.
Shares collapsed 17% Friday, erasing $35 billion in market value after CEO Lip-Bu Tan delivered a sobering assessment of the chipmaker's operational challenges. The drop far exceeded the 10% after-hours decline we reported Thursday night—selling accelerated throughout the regular session as analysts processed the conference call commentary.
Trading volume hit 290 million shares, nearly triple the three-month average. That's the kind of capitulation that marks either a bottom or the start of something worse.
What Changed Overnight
The fourth-quarter numbers themselves beat expectations. Adjusted EPS of $0.15 topped the $0.08 consensus. Revenue of $13.7 billion edged past forecasts. The data center and AI segment posted $4.7 billion, above the $4.4 billion estimate.
None of that mattered once Tan started talking about the path forward.
"It will take time and resolve to turn around this company," the CEO told analysts. That's not the confident messaging investors expected from a stock that had rallied to two-year highs heading into the print.
The Supply Problem
Intel's first-quarter guidance landed at $12.2 billion revenue at the midpoint—well below the $12.6 billion Wall Street expected. Adjusted earnings should come in around breakeven versus analyst estimates of $0.05 per share.
CFO David Zinsner blamed supply constraints. Finished goods inventory has declined to 40% of its peak level, forcing what management called a "hand-to-mouth" supply approach. The shortages should bottom in Q1 and rebound in Q2, but that timeline does nothing for investors who bought the turnaround story at elevated prices.
Here's the uncomfortable reality: TSMC doesn't have supply shortages affecting guidance. Neither does AMD. Intel's manufacturing problems are Intel's problems.
The 18A Question
Intel's foundry bet remains the core turnaround thesis.
Earlier this month, Tan demonstrated working 18A wafers to President Trump, showing the company can fabricate sub-2-nanometer chips domestically. The technology is real. The question is whether customers trust Intel to execute at scale.
The recent U.S.-Taiwan semiconductor deal complicates that narrative. TSMC is expanding Arizona capacity while Intel struggles to meet its own internal demand. Convincing Apple, AMD, or Nvidia to shift production to Intel Foundry Services requires years of flawless execution.
Wedbush analyst Matthew Bryson put it bluntly: "We're at the start of the journey, and you just can't see it in the numbers yet."
Analyst Reactions
The selloff prompted a wave of price target cuts.
Morgan Stanley maintained its Underweight rating with a $21 target—implying another 50% downside from current levels. Bernstein trimmed to $25 from $30. Even Intel bulls found little to defend.
KeyBanc's John Vinh noted that gross margin improvement and competitive products would be key markers for any rerating. "Right now, the burden of proof is on management."
Where It Goes From Here
Intel closed at $37.38, down from Thursday's $45.07. The stock has now given back most of its January gains and trades roughly flat year-to-date.
The chip sector broadly has been a tailwind for months. Intel's inability to participate in that rally tells you everything about its competitive position.
Next catalyst: execution updates on 18A customer wins. Until Intel can point to external validation of its manufacturing capabilities, the stock is dead money.