Intel Shares Slide As Tariff Jitters Cloud Outlook, Analysts See More Challenges Despite New CEO Initiatives

Core Viewpoint - Intel Corp's shares fell sharply following disappointing second-quarter guidance, indicating a challenging economic environment and potential demand issues due to tariffs and trade dynamics [1][3][5]. Group 1: Financial Performance - Intel reported first-quarter revenue of $12.7 billion, which was down 11% sequentially and 1% year-on-year, but exceeded the consensus estimate of $12.2 billion [2]. - The company guided for second-quarter revenue at $11.8 billion, significantly below the consensus estimate of $12.8 billion, indicating a potential 7% sequential decline in revenues [3][4]. - Quarterly earnings were reported at 13 cents per share, surpassing Street expectations by 12 cents, but the revenue guidance for the next quarter was between $11.2 billion and $12.4 billion, reflecting a decline of 2% to 12% sequentially [10][12]. Group 2: Analyst Ratings and Insights - Rosenblatt Securities maintained a Sell rating and reduced the price target from $18 to $14, citing concerns over demand driven by customers purchasing ahead of potential tariffs [2]. - JPMorgan reiterated an Underweight rating and cut the price target from $23 to $20, highlighting that the revenue decline was worse than expected due to trade-related dynamics [4]. - BofA Securities reaffirmed a Neutral rating with a price target of $23, noting that the new CEO is taking positive steps but faces significant challenges from competition and manufacturing inefficiencies [7][8]. Group 3: Strategic Outlook - The uncertain macro environment due to tariffs poses risks to Intel's total addressable market growth and could affect performance in the stronger second half of the year [5]. - The new CEO, Lip-Bu Tan, is implementing strategic initiatives to streamline operations and improve free cash flow generation, with expectations of modest gross margin uplift next year as production moves in-house [6][8]. - Analysts suggest that the long-term strategy may take several quarters to show improvement in Intel's competitive position, with continued gross margin headwinds anticipated through 2025 and 2026 [11][8].