Intel Just Beat Earnings — So Why Did the Stock Get Crushed Back to $48?

Intel’s quarter was the definition of “good results, bad setup.” The company posted a cleaner-than-expected Q4 print and continued to show progress on its multi-year turnaround, but the stock still sold off hard as management guided Q1 below the Street and flagged internal capacity constraints as the limiting factor. After a roughly 50% year-to-date run heading into earnings, investors were clearly positioned for a “something extra” moment — namely an external Foundry anchor customer or a big 18A win — and Intel didn’t deliver that catalyst on this call. With shares sliding back toward the $48 area (a key technical level from the preview ), the market’s message was simple: the Q4 beat counts, but the near-term supply and margin reset matters more.

As a reminder, Intel is a diversified semiconductor leader best known for PC and server CPUs, but it’s also trying to rebuild itself into a credible U.S.-based manufacturing and foundry platform. That transformation is now the core of the narrative: stabilize the product business (Client + Data Center), ramp leading-edge manufacturing nodes (18A, then 14A), and convince external customers that Intel can deliver consistent volume at competitive economics. The bull case is that Intel becomes a “strategic asset” with AI-driven compute demand supporting both CPU volumes and new foundry opportunities; the bear case is that it remains stuck in a multi-year profitability trough while competitors keep taking share, and the foundry payoff arrives too late.

On the headline numbers , Intel beat expectations in Q4. Adjusted EPS came in at $0.15 versus the Street at $0.08, while revenue was $13.7B versus ~$13.4B expected. The profitability picture also looked slightly better than feared: adjusted gross margin was 37.9% (above expectations), even as it fell year over year. Free cash flow was a standout, with management citing positive adjusted free cash flow of $2.2B in the quarter and operating cash flow of $4.3B, which helped support debt reduction. In short, Q4 performance showed Intel can still execute tactically — it’s the forward slope that spooked the tape.

The problem was guidance. Intel forecast Q1 revenue of $11.7B–$12.7B, below consensus at the midpoint, and guided to breakeven adjusted EPS (also a touch light versus estimates). Management framed the outlook as a function of supply constraints and the company no longer being able to lean on inventory drawdowns to meet demand. In other words, Q4 benefited from using both inventory and capacity to satisfy a surge in orders, but that left less “dry powder” for Q1. The market’s takeaway was that demand may be improving, but Intel’s ability to monetize that demand is capped by internal wafer availability and the early costs of its process transition.

Segment results told a similar story: steady demand, constrained supply, mixed execution. Client Computing Group (CCG) revenue fell 7% year over year to $8.2B, a reminder that the PC market remains uneven and increasingly sensitive to component pricing (memory was highlighted as a potential headwind later in the year). Data Center and AI (DCAI) revenue rose 9% year over year to $4.7B, which was one of the brighter spots and aligns with commentary that traditional server CPU compute is seeing a renewed boost from AI inference workloads (orchestration, pre/post processing, retrieval, and broader CPU “attachment” to GPU-heavy builds). Intel Foundry revenue was reported at $4.5B, though the company also disclosed external foundry revenue was just $222M — underscoring that “foundry scale” is still more aspiration than financial reality.

The Foundry timeline was a key point of frustration for investors looking for a near-term rerating catalyst. Several analysts noted that while Intel’s 18A node is now in production and yields are in line with internal plans, it will take time to ramp without dragging down corporate gross margins. More importantly, management signaled that major external customer announcements are more likely in 2H26, and material foundry revenue contributions are unlikely before CY28. CEO Lip-Bu Tan was blunt that building a foundry business “will take time,” and while customer engagements around 14A are active, commitments are still in the “decision window” phase rather than the “sign the check” phase. CFO commentary reinforced that 14A spending will remain constrained until customer commitments become visible later this year and into early next year, which effectively pushes the “spend curve” out and limits near-term excitement.

CapEx and capacity utilization were the heart of the call, and the message was nuanced: Intel needs more capacity, but it is trying to be disciplined about how it spends. Management said the company is prioritizing internal wafer supply to the Data Center segment, while using more external wafers in the PC unit — a tactical shift designed to protect higher value, higher urgency demand. They also suggested the factory network should improve available supply beginning in Q2 and through the rest of 2026, implying Q1 is the trough for both volume and sentiment. On CapEx specifically, Intel guided to 2026 capital spending that is “flat to down slightly,” but with heavier weighting in the first half. That might sound conservative, but it reflects the tension Intel has to manage: invest enough to unlock supply and ramp 18A/14A, while avoiding a runaway spend profile before customer commitments are firm.

The bigger investor question is whether supply constraints are now costing Intel market share — especially in the segments where customers can switch to alternative suppliers with available capacity. This is where the story gets tricky. Management acknowledged demand is outpacing supply across both server and client, and analysts cautioned that assumptions about supply-driven share gains may be optimistic given competitive pressure and alternative products on the market. The risk isn’t just lost near-term revenue; it’s the reputational hit with OEMs and hyperscalers who need consistent delivery. Put simply: supply constraints don’t make customers feel better about Intel’s ability to serve them as a foundry, and they may also open the door for competitors to deepen relationships while Intel is rationing product.

That said, there are reasons the long-side isn’t dead. Several firms argued the guidance may prove conservative, and the company is positioned as a strategic U.S. asset at a time when governments and enterprises are increasingly sensitive to supply chain concentration risk. Intel also continues to push an AI-driven narrative: Tan highlighted AI as a major opportunity “across the portfolio,” and the company is leaning into server roadmaps and platform-level partnerships (including references to collaboration with Nvidia on integrated solutions). If Intel can execute on yields, improve throughput, and expand internal supply through 2026, the company could begin converting the demand backdrop into a more durable growth narrative.

From a stock perspective, the $48 area matters because it’s now the line between “post-earnings reset” and “turnaround doubts re-priced.” This selloff wasn’t a collapse of the fundamental story — it was a valuation and expectations correction after a massive run. Bulls will argue this is a digestion of gains and an opportunity if supply improves into Q2; bears will argue the quarter exposed that Intel’s near-term ceiling is still self-imposed by capacity and margin drag, while the foundry payoff is years away. Either way, this report reinforced the central truth about Intel in 2026: the demand is there, but the turnaround is still an execution marathon, not a victory lap.