So Intel just pulled off the classic earnings magic trick: beat expectations, then immediately make everyone wish they hadn’t bothered. It’s like acing a test only to find out the next exam is going to be brutal.
Here’s what happened: Intel dropped their Q4 2025 numbers after the bell on January 22nd, and honestly? They looked pretty decent. Revenue hit $13.7 billion (Wall Street wanted $13.41 billion), and they made 15 cents per share when analysts were only expecting 8 cents. Not bad for a company that’s been having a rough few years, right?
Wrong. Because then Intel’s management opened their mouths about what’s coming next.
The Plot Twist Nobody Wanted
Turns out, Q1 2026 is going to be a mess. Intel’s forecasting revenue between $11.7-12.7 billion (the midpoint of $12.2 billion is below the $12.55 billion everyone wanted to hear). Even worse? They’re expecting to basically break even on earnings when investors were hoping for 5 cents per share.
The culprit? Supply chain chaos. Intel’s dealing with chip shortages that are apparently going to peak in Q1 before (hopefully) getting better later in the year. It’s like trying to run a restaurant when your supplier keeps forgetting to deliver the ingredients.
Investors did not take this well. The stock is down 14% in premarket trading, dropping from above $54 to around $47. Ouch.
The Good, The Bad, and The Ugly
Let’s give credit where it’s due: Intel’s data center and AI business actually grew 9% to $4.7 billion. Their custom chip business is doing even better, growing over 50% and hitting a $1 billion annual run rate. These are the sexy, high-margin products that everyone wants.
But here’s the thing – Intel’s prioritizing these profitable server and AI chips over regular PC stuff, which means their consumer business is going to take a hit. It’s smart business, but it makes the revenue numbers look uglier in the short term.
Should You Buy This Dip?
Here’s where it gets tricky. Intel’s stock had already run up nearly 50% this year before earnings, pushing the valuation to levels that made some people nervous. With a market cap around $230 billion and a price-to-sales ratio over 4, Intel was priced for perfection.
The company is definitely making progress under new leadership. The AI story is real, their advanced chip manufacturing (the 18A node) is improving, and they’re positioning themselves as a domestic alternative to overseas chip makers.
But supply chain issues are no joke, and if Intel can’t deliver on their Q2 promises, this could get worse before it gets better. The smart money is probably waiting to see if management’s “this is just temporary” story actually holds up.
Sometimes the best dips are the ones you don’t buy immediately. This might be one of those times.