Intel (INTC) stock rose nearly 50% in the month leading up to the chipmaker\u2019s fourth quarter report as hopes had grown for the Silicon Valley icon to make a comeback.<\/p>\n
But the stock tumbled more than 17% Friday as investors were reminded that its road to recovery is far from linear.<\/p>\n
Recent support in 2025 in the form of investments from the US government and Nvidia (NVDA) sent Intel shares soaring in recent months. And three big catalysts helped send Intel shares to their highest level in four years earlier this week: A supportive social media post from President Trump, growing Wall Street optimism over demand for traditional computing chips from AI data centers, and the release of Intel\u2019s Panther Lake chips made with its latest 18A manufacturing process.<\/p>\n
\u201cIt almost turned into a meme stock for a bit,\u201d Bernstein analyst Stacy Rasgon told Yahoo Finance in an interview. \u201cA run like that where it goes vertical into earnings \u2014 you better have a perfect print.\u201d<\/p>\n
But Intel\u2019s financial results weren\u2019t perfect. While Intel\u2019s fourth quarter results exceeded expectations, its first quarter earnings and revenue forecasts were softer than projected. The chipmaker is struggling to meet demand for its server chips due to internal supply constraints. Rasgon said the supply shortages, which stem from Intel\u2019s own factories, point to two issues: The company may be struggling to utilize its manufacturing tools efficiently, and it may have underestimated the scale of AI data center demand for its server CPUs (central processing units).<\/p>\n
Intel CEO Lip-Bu Tan said on a call with analysts Thursday that the company is “working tirelessly to drive efficiency and more output” from its manufacturing plants.<\/p>\n
But Friday’s stock plunge revealed what Rasgon called the \u201chuge disconnect\u201d between the stock\u2019s hype over the past month and Intel\u2019s near-term reality.<\/p>\n
Intel\u2019s product business, which designs CPUs for computers and data center servers, is forfeiting market share to rival chipmakers AMD (AMD) and Arm (ARM). That loss makes it difficult to justify the cost of operating Intel\u2019s manufacturing segment without a substantial external customer, which it lacks thus far despite rumors of two deals with Apple (AAPL). As Intel works to catch up in the space by introducing new manufacturing processes \u2014 following years of delays and missteps \u2014 its higher expenditures are set to weigh on profits.<\/p>\n
The near-term execution issues seen in Intel\u2019s first quarter don\u2019t bode well for its ability to win outside customers and catch up to manufacturing rival TSMC (TSM).<\/p>\n<\/p><\/div>\n
\u201cIntel stock has been difficult because it’s not a clean story,\u201d HSBC analyst Frank Lee told Yahoo Finance, noting that turning around the foundry will take a long time.<\/p>\n
Intel said it should announce customers for its upcoming manufacturing process, 14A \u2014 which has been developed with the hopes of drawing in big deals \u2014 during the second half of 2026 or the first half of 2027. Even so, Lee noted that revenue from those deals wouldn\u2019t show up in its financial statements until 2028 or 2029.<\/p>\n
Rasgon\u2019s assessment yields the same takeaway: \u201cIt’s not something that gets fixed in a quarter or two,\u201d he said of the manufacturing business’s attempts to right the ship.<\/p>\n
\u201cIt’s probably gonna take 10 years to fix it.”<\/p>\n Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.<\/em><\/p>\n<\/div>\n<\/div>