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Intel's Earnings Crossroads: Analysts Weigh Near-Term Struggles Against Long-Term Hopes

Isaac LaneSaturday, Apr 26, 2025 8:49 am ET
14min read

As intel Corp. (INTC) prepares to report Q1 2025 earnings on April 24, analysts are bracing for a mixed performance that underscores both the company’s ongoing challenges and its potential for a turnaround under new leadership. With revenue and earnings expected to decline year-over-year, the focus will be on whether CEO Lip-Bu Tan’s restructuring efforts and strategic pivots can stabilize the semiconductor giant’s trajectory.

The Numbers Tell a Cautionary Tale

Analysts project Intel to report Q1 2025 revenue of $12.3 billion, a 3% year-over-year (YoY) decline from $12.7 billion in Q1 2024. Adjusted EPS is expected to come in at $0.00, a staggering 97.5% drop from $0.18 in the same quarter last year. These estimates reflect pressure from weakening demand for traditional PC chips, margin erosion in the data center segment, and ongoing losses in its foundry division.

The company’s guidance for Q1—revenue of $11.7–12.7 billion and break-even EPS—aligns with the consensus, but the path forward remains fraught with risks. Analysts note that Intel’s struggles in the AI chip market, where competitors like NVIDIA and AMD are gaining share, have compounded these headwinds.

Analyst Sentiment: A "Hold" for Now

The analyst community remains cautiously neutral. Of 31 analysts tracked by Benzinga Edge, 31 rate the stock a "Hold," 1 a "Strong Buy," and 4 a "Strong Sell", resulting in a consensus rating of "Hold". The average price target of $24.62 represents a 23.8% premium to Intel’s April 2025 stock price of $19.43, but this optimism is tempered by near-term execution risks.

INTC Trend

Intel’s shares have plummeted 46.6% over the past year, far outperforming the S&P 500’s 2.1% gain, signaling investor skepticism about its ability to recover.

Key Risks on the Horizon

  1. Trade Tensions and Tariffs: New U.S. tariffs on semiconductors and laptops, expected to take effect in 2025, could disrupt supply chains and dampen demand. Analysts warn of a potential “pull-forward” effect, where buyers accelerate purchases ahead of tariffs, followed by a sales slump in late 2025.
  2. AI Market Competition: Intel’s data center business, which accounts for ~23% of revenue, is under siege. NVIDIA’s dominance in AI-specialized GPUs and AMD’s advancements in CPU-GPU hybrid chips have eroded Intel’s traditional advantages.
  3. Foundry Segment Struggles: Intel’s foundry division, Intel Foundry Services (IFS), reported an operating loss of $4.5 billion in 2024. While management aims to break even by 2027, analysts question whether cost cuts and $1.1 billion in U.S. government grants can offset persistent losses.

Reasons for Optimism: Long-Term Bets

Despite the gloom, analysts see glimmers of hope in Intel’s product roadmap and strategic shifts:
- Next-Gen Chips: The Panther Lake (2025) and Nova Lake (2026) processors, built on Intel’s 18A manufacturing process, aim to reclaim leadership in AI and high-performance computing.
- Restructuring: Tan’s 20% workforce reduction and plans to sell a 51% stake in the Altera programmable chip unit could slash costs and focus resources on core businesses.
- Valuation: At a forward P/E of 20.3, Intel trades at a discount to the S&P 500’s ~25.6 multiple, offering some margin of safety if the turnaround succeeds.

The Bottom Line: A Wait-and-See Stance

Analysts are split on whether Intel’s near-term pain will translate into long-term gain. While $0.00 EPS for Q1 2025 and a $0.13 annual loss in 2025 highlight ongoing struggles, a $1.11 EPS projection for 2026—a 492% YoY jump—suggests confidence in recovery.

The key to Intel’s success lies in Tan’s ability to:
- Accelerate innovation in AI and foundry technologies.
- Navigate trade tensions without sacrificing market share.
- Deliver on cost-cutting promises to improve margins.

For now, investors are advised to remain cautious. While Intel’s valuation and long-term prospects offer some allure, the path to profitability is littered with risks. As one analyst noted, “Intel’s story isn’t dead, but it’s far from alive.”

Final Takeaway

Intel’s Q1 earnings will be a critical test of its ability to stabilize amid industry headwinds. While the consensus “Hold” rating reflects a wait-and-see stance, investors should monitor execution on the Panther Lake launch, foundry margin improvements, and tariff-related demand shifts. For the stock to sustain a rally above $24.62, Intel must prove it can innovate faster than it’s been losing ground. Until then, the verdict remains in the balance.

Ask Aime: "Will Intel's Q1 2025 earnings show a turnaround under new leadership?"

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gnygren3773
04/26
$INTC Check me out this week 😩 https://x.com/meringdalmartin/status/1916149653541617983?s=46
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Rtrebbbs
04/26
$INTC rumor has it that Nvidia wants to buy Intel and I don't see why they wouldn't because they could take over 70% of the CPU market and dominate.
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Interesting_Mix_3535
04/26
Panther Lake launch: make or break for INTC.
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Pinkdeadpool007
04/26
@Interesting_Mix_3535 Think Panther Lake can really turn it around?
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Bothurin
04/26
Trade tensions could hit hard, watch out.
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AkibaSok
04/26
@Bothurin Think tariffs will impact short-term more?
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mrpoopfartman
04/26
Holding some $INTC, but hedged with $NVDA. Betting on long-term turnaround, but keeping a close watch on Q1 results.
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statisticalwizard
04/26
@mrpoopfartman How long you been holding $INTC? Curious if you got a timeline for when you'd consider cutting losses or doubling down.
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auradragon1
04/26
If Intel can't crack AI, they might as well be selling snowballs in a desert. Their future depends on it.
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rareinvoices
04/26
I'm holding a small $INTC bag, but I'm hedging with $NVDA. Gotta diversify when the chips are down.
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SoupOfSadness
04/26
@rareinvoices How long you been holding $INTC? Curious if you think they'll bounce back or just stabilize.
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ExeusV
04/26
Holding $INTC long-term, eyes on 2026 EPS.
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NoBicDeal
04/26
$INTC needs to stop the bleeding before it becomes a meme stock. Long road ahead for this semiconductor giant.
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The_Sparky01
04/26
Intel's AI chips gotta step up, ASAP.
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durustakta
04/26
Lip-Bu Tan's got his work cut out. Restructuring and selling off units is just step one. Step two: out-innovate rivals.
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PunchTornado
04/26
Intel's gotta pivot faster than a crypto trader on a bull run. AI is the new oil, and they're running on fumes.
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Electrical_Green_258
04/26
Panther Lake launch could be a game-changer if Intel executes well. AI market share at stake. 🚀
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Doxfinity
04/26
@Electrical_Green_258 Think Intel can hit $30 soon?
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LarryKingsGhost
04/26
@Electrical_Green_258 Agreed, Panther Lake could boost AI shares.
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ayakabob
04/26
Holy!The INTC stock generated the signal signal, from which I have benefited significantly!
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Motor_Ad2255
04/26
@ayakabob What’s your avg buy-in for INTC? Curious how much you’ve made.
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