SAN FRANCISCO, Jan 23, 2026, 05:14 (PST)
- Intel projected first-quarter revenue between $11.7 billion and $12.7 billion, falling short of Wall Street’s estimates.
- Executives revealed the company is struggling to keep up with demand for server CPUs driven by AI data center expansions.
- Shares plunged sharply in after-hours trading following the outlook.
Intel missed Wall Street’s expectations for its quarterly forecast, revealing it can’t meet the booming demand for server processors powering AI data centers. The news sent its shares tumbling in after-hours trading.
The warning comes at a critical time for Intel, as it pushes to regain footing in manufacturing and the rapidly expanding AI chip sector. Shares had climbed into 2026, fueled by optimism that a sharper product roadmap and external support might jumpstart growth.
Big tech giants are investing heavily in data centers to fuel AI services, with Intel’s server CPUs—those primary chips that run servers—usually paired with Nvidia’s GPUs. Missing out on this trend could cost Intel significant profit, especially as it focuses on launching new PC chips and ramping up factory expansion.
Intel expects first-quarter revenue between $11.7 billion and $12.7 billion, falling short of analysts’ average forecast of $12.51 billion. Adjusted earnings per share — which exclude certain items — are projected to hover around break-even. CEO Lip-Bu Tan admitted the company was “not able to fully meet the demand.” CFO David Zinsner added that “they were all a little bit caught off guard” due to an “erosion in networking performance” that triggered the need for upgrades. Michael Schulman, chief investment officer at Running Point Capital, said the recovery still looks “supply-constrained rather than demand-constrained.” (Reuters)
Executives outlined a planning challenge with real stakes: Intel’s factories are operating at full tilt, yet reallocating capacity to the in-demand data-center components isn’t immediate. Zinsner admitted the company hadn’t run its factories anticipating shifts in data-center demand.
Intel has started shipping its “Panther Lake” PC chips, the first to use its 18A manufacturing process. While the company says yields—the percentage of usable chips per wafer—are getting better each month, low yields remain a challenge, putting pressure on profit margins.
The foundry push complicates things further. Intel has delayed ramping up spending on its upcoming 14A process, holding out for a major external customer. Executives have indicated that investors will probably spot a customer win reflected in the company’s capital expenditure.
The surge leading up to this report was impossible to ignore. Intel’s stock climbed 40% in the last month alone, Reuters noted, following a tough 2024 when shares plunged over 60%. In 2025, the stock jumped 84%, far surpassing the semiconductor index’s 42% gain.
Some analysts didn’t mince words on the short-term impact. Bernstein acknowledged the server cycle is genuine but slammed Intel for “woefully misjudging it.” Jefferies pointed out Intel’s “much lower share in the Cloud vs AMD” and noted ongoing struggles with product issues. (The Star)
Intel reported fourth-quarter revenue of $13.7 billion, a 4% drop compared to the previous year, with non-GAAP earnings per share hitting $0.15. Tan highlighted Intel’s “essential role of CPUs in the AI era” as expanding, noting the company is ramping up supply to keep pace with what it described as strong demand. (Intel Corporation)
Zinsner also highlighted supply challenges extending beyond just server components. “We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond,” he noted. Investors mulled over whether this bottleneck could limit Intel’s ability to capitalize on AI-driven demand. According to Investopedia, the stock surged nearly 50% from January through Thursday’s close before slipping in late trading.
The downside is clear. If supply bottlenecks and manufacturing yields don’t get better soon, Intel could miss its chance in data centers and lose more ground to AMD in both servers and PCs, as well as to Arm-based designs gaining traction in personal computers. On top of that, rising memory chip prices might push up PC costs and reduce demand.
The Financial Times reported Intel shares slipping following warnings about supply constraints that might cap growth. Investors will be keenly watching for any easing in supply during Q2 and whether Intel can attract external clients for its upcoming process nodes. (Ft)
