Intel stock sinks as company's Q1 outlook falls short of Wall Street expectations

Core Viewpoint - Intel's stock experienced a significant decline of up to 15% following a disappointing first quarter financial outlook, which fell short of Wall Street expectations, particularly due to supply shortages impacting demand for AI data center chips [1][2]. Financial Performance - Intel expects first quarter revenue of $12.2 billion, below the $12.6 billion forecasted by analysts, and projects earnings per share of $0, missing the estimated $0.08 [1]. - The company reported fourth quarter earnings per share of $0.15, slightly above the previous year's $0.13 and exceeding the projected $0.09, with fourth quarter revenue of $13.7 billion, a 4% decline from the previous year but higher than the expected $13.4 billion [3]. AI Demand and Supply Challenges - Intel's AI-related businesses grew in "double digits" during the fourth quarter, both sequentially and year-over-year, indicating rising demand for its CPUs [4]. - The company is currently facing supply constraints, particularly in the first quarter, which limits its ability to meet customer demand [2]. Manufacturing and Cost Pressures - The development of new manufacturing process nodes, such as 18A, is expected to impact gross margins negatively, with the adjusted gross margin for the fourth quarter at 37.9%, down from 42.1% the previous year but above the estimated 36.5% [5]. - Rising costs for memory and storage components may also affect demand for systems utilizing Intel processors, potentially impacting revenue [6]. Future Outlook - CFO David Zinsner indicated that current challenges could limit revenue opportunities for Intel in 2026 [7].