Intel (INTC) Q425 Recap - I'm off tonight, you know I'm short supply and I'm starting to feel it's tight...

Summary of Intel Corp Q4 2025 Earnings Call Company Overview - Company: Intel Corp (Ticker: INTC) - Industry: U.S. Semiconductors Key Financial Results - Q4 2025 Results: - Revenue: $13.7 billion, exceeding Street expectations of $13.4 billion [12][20] - Non-GAAP EPS: $0.15, above consensus of $0.09 [12][20] - Gross Margin: 37.9%, beating expectations of 36.5% [12][20] - Datacenter Revenue: Strong performance at approximately $4.7 billion, exceeding consensus by over $400 million [12][20] - Client Computing Group (CCG) Revenue: $8.2 billion, down ~7% YoY and ~4% QoQ, below consensus [14][20] Q1 2026 Outlook - Guidance: - Revenue expected at ~$12.2 billion, below Street estimates of $12.6 billion [13][35] - Non-GAAP EPS forecasted at $0.00, below consensus of $0.07 [35] - Gross Margin projected to decline to 34.5%, down ~340 bps QoQ [16][35] - Supply Constraints: Continued prioritization of server shipments over client shipments, leading to a more pronounced decline in CCG revenues [16][35] Investment Implications - Rating: Market-Perform with a price target of $36, indicating a potential downside of 34% from the current price [5][19] - Concerns: - Supply constraints and misjudged capacity footprint may exacerbate share losses [15][17] - Higher memory and component prices could impact client market growth [16][19] Additional Insights - Operational Challenges: - The ramp of the 18A process technology is progressing but remains margin dilutive [15][17] - Non-controlling interest from SCIP deals may lead to material earnings headwinds [18][36] - Market Performance: Stock has risen 47% in the past three weeks, primarily driven by market sentiment rather than fundamentals [15][17] Financial Metrics - Capex: Expected to be flat to down slightly YoY, with Opex maintained at ~$16 billion for 2026 [16][19] - Inventory: Increased to $11.6 billion with inventory days slightly down to 123 days [20][36] Conclusion Intel's Q4 results showed solid performance driven by datacenter demand, but the outlook for Q1 2026 is cautious due to supply constraints and declining client revenues. The company faces challenges in capacity management and rising costs, impacting future growth potential. The current market sentiment has led to a significant stock price increase, but fundamental concerns remain.