Intel is losing money — and the stock is losing ground

Intel $INTC shares plunged more than 13% in premarket trading Friday after the chipmaker issued a softer-than-expected outlook for the first quarter, overshadowing an earnings beat and reigniting concerns about its turnaround.

The company forecast first-quarter revenue of $11.7 billion to $12.7 billion, with breakeven adjusted earnings, below the roughly $12.5 billion in sales and a small profit of $0.08 projected by Wall Street analysts tracked by Bloomberg.

For the fourth quarter, Intel reported adjusted earnings of 15 cents per share on $13.7 billion in revenue, topping analysts’ estimates. But investors focused on management’s warning that supply levels will hit their lowest point in Q1, with improvements expected later in the year.

"We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond," David Zinsner, Intel CFO, said in an earnings statement.

CEO Lip-Bu Tan said the company is in the middle of a multi-year turnaround, as Intel ramps production on advanced manufacturing nodes — semiconductor manufacturing processes — like 18A and develops its next-generation 14A process. Intel said early customers are evaluating 14A, while PC chips built on 18A are beginning to ship, though yield issues and production ramp costs are pressuring margins.

The results highlight Intel’s ongoing struggle to capitalize on the AI boom that has fueled rival chipmakers such as Nvidia $NVDA and AMD. While Intel’s data center business posted growth, the company acknowledged it underestimated the surge in demand for server chips used alongside AI accelerators, leaving factories running at capacity but still unable to fill all orders. So even as appetite for data-center and AI-related chips remains strong, Intel said supply constraints and manufacturing bottlenecks are limiting its ability to meet demand.

The sharp premarket drop reverses some of Intel’s recent stock gains and underscores investor skepticism about how quickly the company can translate its manufacturing roadmap into sustained revenue and profit growth.