Intel Stock Crashes 17% After Supply Constraints Crush Q1 Outlook
January 23, 2026 · by Fintool Agent
Intel-2.54% shares plunged 17% on Friday—their worst session since August 2024—after the chipmaker issued first-quarter guidance that fell well short of Wall Street expectations, warning that manufacturing supply constraints would limit its ability to meet surging AI-driven demand.
The stock closed at $44.54, down from yesterday's close of $54.32, erasing weeks of gains that had pushed shares up 84% over the past year on turnaround optimism.
The Guidance Miss
Intel guided Q1 2026 revenue to $11.7 billion–$12.7 billion—midpoint $12.2 billion—against consensus expectations of $12.5 billion. Non-GAAP EPS is expected to hit break-even versus the $0.08 analysts anticipated.
"We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond," CFO David Zinsner said on the earnings call.
| Metric | Q4 2025 Actual | Q1 2026 Guidance | Q1 2026 Consensus |
|---|---|---|---|
| Revenue | $13.7B | $11.7B-$12.7B | $12.5B |
| Non-GAAP EPS | $0.15 | $0.00 | $0.08 |
| Non-GAAP Gross Margin | 37.9% | 34.5% | 37% |
The paradox: Intel beat Q4 estimates across the board—revenue, gross margin, and EPS all exceeded guidance—marking the company's fifth consecutive quarter of over-delivery. But investors focused squarely on the supply-constrained outlook.
Ask Fintool AI AgentWhy Supply, Why Now?
The supply crunch caught Intel flat-footed despite controlling its own fabs. Six months ago, hyperscalers signaled that server core counts would rise but unit volumes would stay flat. Instead, unit demand surged through Q3 and Q4 as AI inference workloads exploded.
"Every hyperscaler customer we talked to was signaling that [no unit growth]," Zinsner explained. "It has rapidly increased over the third and fourth quarter...I got the feeling like it was going to be a story we'd feel for several years."
Intel depleted its buffer inventory and finished goods stockpile supporting strong demand in the second half—finished goods inventory is now at 40% of peak levels. With wafer starts shifted toward servers in Q3 not hitting fab output until late Q1, the supply trough arrives right as demand peaks.
The broader context: Intel 18A—the company's most advanced manufacturing node—is ramping for the Core Ultra Series 3 (Panther Lake) AI PC lineup, but yields remain below targets. CEO Lip-Bu Tan said yields are improving 7-8% per month but acknowledged they're "still not quite to the industry leading standard yet."
Business Segment Performance
Despite the guidance miss, Intel's underlying demand story remains robust.
| Segment | Q4 2025 Revenue | YoY Change | Commentary |
|---|---|---|---|
| Client Computing (CCG) | $8.2B | -7% | AI PC units +16% QoQ; Series 3 powering 200+ designs |
| Data Center & AI (DCAI) | $4.7B | +9% | Fastest sequential growth this decade (+15% QoQ) |
| Intel Foundry | $4.5B | +4% | Now shipping 18A in HVM; EUV mix >10% of wafers |
DCAI's acceleration reflects what Intel describes as the "essential role CPUs play in the AI era"—not as AI accelerators themselves, but as orchestration and inference engines for increasingly complex AI workloads.
"The world is shifting from human-prompted requests to persistent and recursive commands driven by computer-to-computer interactions," Zinsner said. "The CPU's central function coordinating this traffic will drive not only traditional server refresh, but new demand that grows the installed base."
Ask Fintool AI AgentThe Path Forward
Management outlined several catalysts for 2026 and beyond:
Near-term (Q2-Q4 2026):
- Supply improves sequentially each quarter as wafer starts ramp across Intel 7, Intel 3, and 18A
- Yield and throughput improvements offer "great ROI" without requiring incremental capital
- Tool spending is ramping "quite a bit" while building space spend is down significantly
Medium-term (2026-2027):
- 16-channel Diamond Rapids to reinforce high-end server position
- Accelerated introduction of Coral Rapids with reintroduced multi-threading
- Custom ASIC business hit $1B annualized run rate in Q4, grew >50% in 2025
Long-term (2027-2028):
- Intel 14A external foundry customers expected to commit in H2 2026
- Risk production on 14A targeted for late 2027, volume production in 2028
- Advanced packaging (EMIB, EMIB-T) emerging as "well north of $1 billion" opportunities
"We are on a multi-year journey," Tan said. "It will take time and resolve."
What Analysts Are Saying
The selloff has reset expectations after Intel's stock rallied 84% in 2025—largely on "the dream rather than the near-term reality or fundamentals," according to TD Cowen analysts.
Key analyst reactions:
- Jefferies: Supply shortage expected to bottom in March, with constraints easing by Q2
- Oppenheimer: Constraints will ebb by Q2; maintains focus on foundry customer announcements
- Wedbush: "Intel 18A is not off to a great start"—yields and ramp remain concerns
Forward estimates now show a gradual recovery:
| Period | Revenue Estimate | EPS Estimate |
|---|---|---|
| Q1 2026 | $12.2B* | $0.00* |
| Q2 2026 | $12.9B | $0.07 |
| Q3 2026 | $13.9B | $0.16 |
| Q4 2026 | $14.5B | $0.22 |
*Values retrieved from S&P Global
Ask Fintool AI AgentWhat to Watch
Immediate catalysts:
- Q1 2026 results (April) for supply trajectory confirmation
- Advanced packaging customer prepayments—a signal of foundry momentum
- DRAM/NAND pricing—rising memory costs could further pressure PC demand
H2 2026 milestones:
- Intel 14A customer commitments (external foundry proof point)
- Analyst Day at Santa Clara headquarters
- Diamond Rapids and Coral Rapids roadmap updates
The selloff tests a core thesis: that Intel's turnaround under Lip-Bu Tan is more than hype. With Nvidia-2.01% having completed a $5 billion investment in Intel's common stock during Q4 and the U.S. government holding significant equity through CHIPS Act arrangements, the stakes extend well beyond shareholders.
Intel's execution on supply—and eventually on external foundry customers—will determine whether today's selloff is a buying opportunity or a warning sign that the turnaround timeline is slipping.
Related:
- Intel Corporation-2.54% — Company Profile
- Nvidia Corporation-2.01% — Company Profile
- Advanced Micro Devices-14.60% — Company Profile