CFO says company is unable to meet demand for server chips
CEO Tan focuses on cost-cutting and new product roadmap
Intel’s stock outperforms semiconductor index despite challenges
By Arsheeya Bajwa
Jan 22 (Reuters) - Intel (INTC.O) forecast first-quarter revenue and profit below market estimates on Thursday, as it struggles to match supply to booming demand for traditional server chips used in artificial intelligence data centers.
Intel forecast current-quarter revenue at between $11.7 billion and $12.7 billion, compared with analysts’ average estimate of $12.51 billion, according to data compiled by LSEG.
It expects adjusted earnings per share to break even in the first quarter, compared with expectations of adjusted earnings of 5 cents per share.
Investors and analysts have hoped that rapid data center buildouts commissioned by large tech companies to advance their AI businesses will drive sales for Intel’s traditional server chips that are used alongside Nvidia’s (NVDA.O) market-leading graphics processing units (GPU).
After years of missteps left Intel struggling in the fast-growing AI chip market and drained its finances, Tan has engineered a turnaround strategy centered on cutting costs and eliminating management layers, while championing a fresh product road map. With a slew of high-profile investments in Intel last year - a $5  billion investment from Nvidia, $2  billion from SoftBank (9984.T) and a U.S. government stake in the company - investors’ confidence in the company’s revival has been high.
Tan has also 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.
After a more than 60% drop in its share price in 2024, Intel’s stock gained 84% in 2025, far outperforming the benchmark semiconductor index’s (.SOX) 42% rise. Its shares are up more than 40% so far this month.
The company has started shipping its new “Panther Lake” PC chips - the first product made using Intel’s make-or-break 18A manufacturing technology, and analysts expected the production ramp-up to hurt margins. Reuters has reported that only a small percentage of the chips printed via 18A have been good enough to make available to customers. Intel has said its yields, or the number of good chips per silicon wafer, are improving monthly. Weak yields also 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.
“We navigated industry-wide supply shortages,” said David Zinsner, Intel’s chief financial officer. “We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond.”
Intel has also been consistently losing share in the PC market to rival AMD (AMD.O) and chip blueprint designer Arm Holdings (ARM.O) .

On October 26th, after the U.S. stock market closed, chip giant Intel released its Q3 2023 financial report. The report showed that Intel's total revenue in the third quarter fell 8% year-on-year to $14.16 billion, marking the seventh consecutive quarter of declining sales, although it was still higher than the market expectation of $13.53 billion. In the second quarter, revenue had previously dropped 15% year-on-year, and the company expects revenue to return to growth in the fourth quarter. However, the sales of the Network and Edge Group (NEX), which includes IoT and other segments, fell 32% year-on-year to $1.5 billion. More importantly, the server chip division, named "Data Center and Artificial Intelligence," has yet to recover growth, with third-quarter revenue declining 10% year-on-year to $3.8 billion. Facing multiple competitive pressures, do you think Intel can turn the tide in the AI era?

On October 26th, after the U.S. stock market closed, chip giant Intel released its Q3 2023 financial report. The report showed that Intel's total revenue in the third quarter fell 8% year-on-year to $14.16 billion, marking the seventh consecutive quarter of declining sales, although it was still higher than the market expectation of $13.53 billion. In the second quarter, revenue had previously dropped 15% year-on-year, and the company expects revenue to return to growth in the fourth quarter. However, the sales of the Network and Edge Group (NEX), which includes IoT and other segments, fell 32% year-on-year to $1.5 billion. More importantly, the server chip division, named "Data Center and Artificial Intelligence," has yet to recover growth, with third-quarter revenue declining 10% year-on-year to $3.8 billion. Facing multiple competitive pressures, do you think Intel can turn the tide in the AI era?

In the AI era, can Intel win a comeback?

Intel forecasts first-quarter revenue between $11.7 billion and $12.7 billion, below analysts' estimate of $12.51 billion, with expected adjusted earnings per share breaking even. The company struggles to meet demand for server chips amid a booming AI market. CEO Tan focuses on cost-cutting and a new product roadmap to revive the company after significant financial challenges. Despite a 60% drop in share price in 2024, Intel's stock has gained 84% in 2025, outperforming the semiconductor index. The company faces ongoing supply shortages and competition from AMD and Arm Holdings.

- Intel forecasts first-quarter revenue and profit below market estimates due to supply challenges for server chips used in AI data centers.  
- CEO Tan is implementing a turnaround strategy focused on cost-cutting and a new product roadmap, while Intel's stock outperformed the semiconductor index in 2025.  
- CFO Zinsner indicated that supply will hit its lowest in Q1 before an expected improvement in Q2, as Intel continues to face competition in the PC market.

Intel forecasts first-quarter sales and profit below estimates