Shares of Intel Corp (NASDAQ:INTC, ETR:INL) lost nearly 7.3% on Friday after the chipmaker offered a disappointing revenue outlook for the second quarter, triggering a flurry of analyst downgrades and warnings about the company’s multi-year turnaround.
Despite beating expectations for the first quarter, Intel forecast second-quarter revenue of $11.8 billion, falling short of analysts’ estimates and raising fresh concerns over macroeconomic uncertainty, tariff headwinds, and persistent margin pressure.
“We believe Intel's new CEO Tan is taking the right actions... however, INTC's large size, unprofitable manufacturing... and financial commitments... make it tougher to turn things around in the next few years,” Bank of America analysts wrote in a note, reiterating their Neutral rating and $23 price objective.
Bank of America slashed its earnings estimates for Intel through 2027, citing weaker-than-expected gross margins and competitive threats from AMD, NVIDIA, and ARM.
Intel’s first-quarter revenue came in at $12.7 billion, above expectations, buoyed by demand from US hyperscale customers. However, analysts at Jefferies noted the beat was driven by “pull-ins” — orders moved forward — and that the overall picture remains dim.
“Results aided by pull-ins but guidance is below given macro uncertainty while GMs lower as well,” Jefferies analysts said, maintaining their Hold rating and $23 price target. “There aren’t many bright spots to point to, with DCAI declining and management walking back their guide for AI PC unit growth.”
Jefferies cut their 2025 EPS forecast by 29% and said it would take time for new CEO Lip-Bu Tan to make a lasting impact. “It will take a long time for Lip-Bu to put his stamp on INTC, and we'll continue to sit on the sidelines until we have a better vision of the turnaround.”
Wedbush analysts echoed the cautious tone, describing Intel’s outlook as out of sync with the broader hardware sector. “Most other conversations we've had... suggest component inventory is getting pulled in prior to tariffs, creating some demand growth into CQ2,” the firm wrote. “With Intel seemingly trailing peers' performance, we don't see the delta as positive.”
Despite ongoing efforts to streamline operations and reduce capital spending, Intel’s challenges appear to be structural and unlikely to resolve in the near term. Bank of America emphasized the absence of near-term recovery catalysts, though it acknowledged the company’s “important enterprise incumbency” and CEO Tan’s track record at Cadence.
The next potential catalyst, according to BofA, is Intel’s “Foundry Connect” event on April 29, where the company may announce partnerships with companies like NVIDIA, Broadcom, MediaTek, and Cisco.
Still, analysts remain skeptical. “As much as we would like to get behind the stock at this level,” Jefferies concluded, “there seems little to get excited about from a product, foundry, or financial perspective.”