TLDR
- Intel shares tumbled 17% Friday, marking the worst single-day loss since August 2024
- Q1 revenue forecast of $11.7-$12.7 billion missed analyst expectations of $12.51 billion
- Retail trader poll shows 60% view the selloff as overblown and a chance to buy
- Supply chain issues prevented Intel from meeting AI data center demand, costing sales
- Morgan Stanley increased price target to $41 but warns supply problems hurt foundry credibility
Intel delivered a painful blow to shareholders Friday. The stock collapsed 17% in its worst performance since August 2024. The catalyst was a first-quarter forecast that fell well short of Street estimates.
The chipmaker guided for Q1 revenue between $11.7 billion and $12.7 billion. Wall Street analysts expected $12.51 billion. Intel also projected adjusted earnings per share at break-even compared to the $0.05 consensus.
Fourth-quarter results actually topped expectations. Revenue and profit both beat analyst forecasts. But the disappointing outlook buried the good news.
Bullish Sentiment Holds Strong
Sentiment metrics tell an interesting story. Intel’s Stocktwits sentiment score has stayed in “extremely bullish” territory for two weeks straight. It climbed even higher after Thursday’s earnings report. Trading chatter about the stock jumped 177% in the past week.
“Market is overreacting to the forward guidance,” posted one trader. Another predicted a rally to $50 before the stock moves sideways.
Intel’s management made a key admission during the earnings call. The company failed to accurately forecast demand for AI data center products. Orders exceeded capacity and Intel couldn’t fulfill them. That meant leaving profitable revenue on the table.
Analysts Update Their Views
Morgan Stanley lifted its Intel price target from $38 to $41. The firm kept its Equal Weight rating unchanged. The analyst highlighted “meaningful supply constraints” as a major concern. These problems look worse considering Intel’s ongoing foundry turnaround efforts.
Customers need reliability from foundry partners. Supply bottlenecks damage Intel’s credibility in contract manufacturing. This hurts the company’s ability to compete for foundry business.
Other firms adjusted their views too. Truist Securities raised its target to $49 from $39. RBC Capital Markets dropped its target to $48 from $50. Both expressed concern about the weak Q1 guidance.
Wall Street consensus leans cautious. Out of 47 analysts tracking Intel, 33 rate it a hold. Eight recommend buying. Six say sell. The average price target stands at $46.09, barely $1 above the stock’s pre-crash closing price.
Recent Product Launches Overshadowed
Intel recently launched its Core Ultra Series 3 processors. The company has shown progress in key business areas. These positives got buried under the guidance miss and supply problems.
The stock had been on fire before last week. Shares soared 84% during 2024. That rally continued into the new year until hitting this roadblock. Despite Friday’s crash, Intel stock still sits up more than 22% in January.
Missing out on AI data center sales stings particularly hard. This market segment ranks among the fastest-growing in the chip industry. Intel’s supply chain failures cost it revenue during a crucial growth period.
The supply constraints raise questions about Intel’s manufacturing capabilities. Foundry customers want partners who can scale production reliably. These issues don’t inspire confidence.
Retail traders clearly see value at current levels. Professional analysts remain more skeptical. The debate between retail optimism and institutional caution will likely drive near-term price action.
