Key Points
- Intel issued a disappointing forecast for first-quarter revenue and profit.
- The company is struggling to meet the booming demand for its server chips from the AI data center build-out.
- The weak forecast sent Intel’s stock down 7% in after-hours trading.
- The company is also facing challenges with its new 18A manufacturing process and a global shortage of memory chips.
Intel’s comeback story hit a speed bump on Thursday. The chip giant issued a disappointing forecast for the first quarter, with both revenue and profit expected to come in below Wall Street’s expectations. The news sent Intel’s stock down 7% in after-hours trading.
The company is struggling to keep up with the booming demand for its traditional server chips, which are used in the massive data centers being built to power the artificial intelligence revolution. While this sounds like a good problem to have, Intel’s finance chief admitted that the company and its cloud-computing customers were “all a little bit caught off guard” by the sudden surge in demand.
“We navigated industry-wide supply shortages,” he said. “We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond.”
This is a frustrating setback for a company that has been on a roll lately. After a terrible 2024, Intel’s stock soared 84% in 2025 as investors bet on the turnaround plan put in place by new CEO Lip-Bu Tan. A series of high-profile investments from Nvidia and SoftBank also boosted confidence.
But the weak forecast is a reminder that Intel still has a long way to go. The company is also facing challenges with its new “Panther Lake” PC chips, which are the first to be made using its make-or-break 18A manufacturing technology. Yields from this new process are reportedly still low, hurting profit margins.
And to top it all off, a global shortage of memory chips is driving up PC prices, which could dampen demand for Intel’s core products. After a year of soaring optimism, it seems a dose of reality has returned to the Intel story.
