Intel forecasts quarterly revenue and profit below analyst expectations, signaling weakness in chip demand and market position.

Intel forecast first-quarter revenue of between US$11.7-billion and US$12.7-billion, below analysts' average estimate of US$12.51-billion, and expects adjusted earnings per share to break even compared with expectations of 5 US cents per share. The forecast triggered a 7 per cent decline in Intel shares in after-hours trading. While investors had anticipated that rapid data center buildouts by large tech companies to advance their AI businesses would drive sales for Intel's traditional server chips used alongside Nvidia's graphics processing units, demand for AI surprised the cloud-computing giants, which have had to scramble to upgrade aging chip fleets because of an "erosion in networking performance," according to Intel finance chief David Zinsner. "They were all a little bit caught off guard," Zinsner said.

CEO Tan has engineered a turnaround strategy centered on cutting costs and eliminating management layers, while championing a fresh product road map. The company has significantly pared back contract manufacturing ambitions promoted by his predecessor, Pat Gelsinger, in an effort to shore up Intel's balance sheet after capital-intensive expansions pummeled margins. Recent high-profile investments have bolstered confidence in the company's revival, including a US$5-billion investment from Nvidia, US$2-billion from SoftBank, and a U.S. government stake in the company. After a more than 60-per-cent drop in its share price in 2024, Intel's stock gained 84-per-cent in 2025, far outperforming the benchmark semiconductor index's 42-per-cent rise, and shares are up more than 40 per cent so far this month.

Manufacturing challenges continue to constrain Intel's margins. The company has started shipping its new "Panther Lake" PC chips—the first product made using Intel's 18A manufacturing technology—but Reuters reported that only a small percentage of the chips printed via 18A have been good enough to make available to customers. Intel stated its yields, or the number of good chips per silicon wafer, are improving monthly, though weak yields routinely pressure margins. A global shortage of memory chips has boosted memory chip prices and made personal computers, a key market for Intel, more expensive. David Zinsner stated: "We navigated industry-wide supply shortages. We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond." The company has also been consistently losing market share in the PC market to rival AMD and chip blueprint designer Arm Holdings.