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2026-01-23T15:27:42.558Z
- Intel shares fell sharply on Friday after the company announced its earnings after the bell on Thursday.
- The chipmaker beat sales expectations but issued soft guidance.
- The company said manufacturing issues are hampering its ability to meet demand for its products.
movement: Intel stock fell 17% on Friday. The company’s shares have increased 23% since the beginning of the year and 119% in the past 12 months.
why: Intel’s decline came after its latest financial results disappointed investors’ high expectations.
The company slightly beat analysts’ expectations for both adjusted earnings per share and revenue, but its sales outlook for the quarter was weak. The company said it expects sales for the current quarter to be between $11.7 billion and $12.7 billion, below expectations of $12.51 billion.
Intel Chief Financial Officer David Zinsner blamed the lukewarm guidance on the company’s inability to keep up with demand for its products, citing production issues. He told CNBC he expected the problem to improve in the coming quarters, but CEO Lip Vu Tan said on the chipmaker’s earnings call that a true turnaround will take “time and determination.”
what it means: Intel’s stock price decline comes as investors are focused on what’s next for the AI industry. While the nod to high demand is encouraging, especially for Intel, investors are concerned that the company’s turnaround is not happening as quickly as expected.
The Trump administration’s acquisition of a 10% stake and Nvidia’s $5 billion injection into the company have given new life to the stock, which has been on a rough patch over the past year. However, comments from Intel executives at the company’s earnings conference suggest that there is a long way to go before the turnaround is complete.
While Friday’s decline is company-specific rather than indicative of AI trading as a whole, it also serves as a reminder that the stock prices of many tech and AI companies are priced perfectly, and just missing expectations is enough to send their stocks down.
