Intel Stock Drops After Weak Forecast Raises Fresh AI and Margin Concerns
Intel is under renewed pressure tonight after the company delivered a quarterly forecast that fell short of Wall Street expectations, sending its stock sharply lower and raising fresh questions about the pace of its turnaround.
Shares slid about seven percent in after-hours trading after Intel warned investors to expect weaker revenue and profit in the current quarter than the market had anticipated. The company now sees revenue coming in below consensus estimates and it expects adjusted earnings to land around break-even, instead of posting a modest profit that analysts were counting on.
At the heart of this disappointment is a familiar challenge for Intel, keeping up with a data center market that is being reshaped by artificial intelligence. Big tech companies are spending aggressively to build AI infrastructure, but much of that spending is flowing toward specialized AI processors, particularly graphics chips, rather than Intel’s traditional server CPUs. Intel does benefit when those CPUs are used alongside AI accelerators, but the company admits demand patterns caught parts of the industry off guard, leading to supply and performance mismatches.
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This forecast also lands at a sensitive moment for Intel’s leadership. After years of strategic missteps in the AI chip race, the company is in the middle of a high-stakes turnaround. Management has been cutting costs, flattening management layers and narrowing its ambitions in contract manufacturing to protect its balance sheet. Those moves, combined with major investments from partners and government support, helped fuel a strong rebound in Intel’s share price last year.
But the fundamentals remain fragile. Intel has begun shipping its new Panther Lake PC chips, built on its critical 18A manufacturing process. While this technology is central to Intel’s future, production yields are still improving and weak yields tend to squeeze margins. On top of that, a global shortage of memory chips has pushed up PC prices, weighing on demand in one of Intel’s core markets.
There is also the competitive reality. Intel continues to lose market share in PCs to AMD and Arm-based designs are gaining ground. That makes every earnings forecast more consequential, because investors are watching closely for signs that Intel can stabilize its core businesses while rebuilding credibility in advanced manufacturing and AI-era computing.
Why does this matter beyond one stock move. Intel remains a cornerstone of the global semiconductor ecosystem, tied closely to supply chains, national technology strategies and the future of data centers worldwide. Its success or failure has implications that stretch far beyond quarterly numbers.
We will continue tracking how Intel navigates this critical phase and what it means for the broader chip industry. Stay with us for the latest developments and deeper insight as this story unfolds.
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