What Happened?
Shares of computer processor maker Intel (NASDAQ:INTC) fell 15.6% in the morning session after the company reported underwhelming fourth quarter results with sales guidance for the next quarter falling short of Wall Street's expectations.
Adding to the concerns, management revealed that severe supply chain constraints would critically hamper production in the first quarter of 2026. Executives guided revenue down to a midpoint of $12.2 billion, missing analyst consensus, and cautioned that earnings would effectively shrink to breakeven levels.
On the other hand, the backward-looking numbers actually exceeded Wall Street's forecasts, with revenue reaching $13.7 billion. Earnings and operating income also beat consensus estimates. Still, this was a mixed quarter, as the forward-looking guidance muted the euphoria that had supported the stock's rally the days leading to the earnings announcement.
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What Is The Market Telling Us
Intel’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. But moves this big are rare even for Intel and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 9.5% as its positive momentum continued as recent analyst upgrades completely reshaped the market narrative.
While the street had previously forecasted meager growth, researchers at HSBC and Seaport argued that the rise of agentic artificial intelligence, autonomous systems capable of planning and executing tasks, would necessitate a massive refresh of general-purpose server compute. This fresh thesis effectively quadrupled the projected growth rates for server CPU demand, catching bearish investors off guard. The sentiment shift was compounded by heavy options trading and optimism surrounding the imminent fourth-quarter earnings report. Market participants likely bid up the stock, convinced that the new Panther Lake chips and the 18A manufacturing process were finally set to capture lost market share.
Intel is up 15.1% since the beginning of the year, but at $45.32 per share, it is still trading 16.6% below its 52-week high of $54.32 from January 2026. Investors who bought $1,000 worth of Intel’s shares 5 years ago would now be looking at an investment worth $817.46.
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