Analyst sends blunt 3-word warning on Intel stock after earnings

Core Viewpoint - Intel's stock experienced a significant decline of 17% on January 23 due to weaker-than-expected guidance for the current quarter, despite beating fourth-quarter earnings expectations [1][2]. Financial Performance - In Q4 2025, Intel reported adjusted earnings of 15 cents per share, surpassing Wall Street's forecast of 8 cents, with revenue reaching $13.7 billion, exceeding the estimate of $13.4 billion [1]. - For the current quarter, Intel anticipates revenue between $11.7 billion and $12.7 billion, with breakeven adjusted earnings, falling short of consensus forecasts of 5 cents per share on $12.51 billion in revenue [2]. Stock Performance and Market Sentiment - Over the past 12 months, Intel's shares have more than doubled, with a year-to-date increase of 22% as of January 23, significantly outperforming the S&P 500's 1% gain [3]. - The recent stock pullback has led investors to question whether it represents a buying opportunity or a warning sign [3]. Management and Strategic Changes - Intel's stock suffered in 2024 due to management errors and an outdated AI strategy, resulting in layoffs. CEO Lip-Bu Tan, who took over in March 2025, has implemented major changes to revitalize the company, including cost-cutting and leadership restructuring [4]. Government and Strategic Partnerships - The U.S. government has become Intel's largest shareholder after investing $8.9 billion last year, while Nvidia is also a significant shareholder following a $5 billion investment. Both companies are collaborating on custom data center CPUs [5]. Product Development and Challenges - Intel's stock rose 11% on January 21, driven by optimism regarding new server chips and the overall sentiment in the AI sector. The company has begun shipping its new "Panther Lake" PC chips, utilizing its 18A manufacturing technology [6]. - However, yields from the 18A technology remain uncertain, with only a small percentage of chips meeting quality standards. CEO Tan noted that yields are improving by 7% to 8% per month [7]. Analyst Insights - Analyst Matt Bryson from Wedbush maintained a neutral rating and a $30 price target for Intel, citing supply constraints and expected declines in first-quarter sales due to depleted excess inventory [9]. - Bryson expressed concerns about early-stage yields from the 18A process, which may limit output and pressure margins. He noted that Intel's stock price reflects more progress than the company has achieved [10][11].