Intel Corp (NASDAQ:INTC, XETRA:INL) shares tumbled more than 14% Friday morning following the company’s latest earnings report, as analysts expressed concern over ongoing supply constraints, margin pressure, and a slow path to meaningful profitability.
Jefferies reiterated a Hold rating with a $45 price target, highlighting “soft guidance on supply constraints and further margin struggles.” While December results showed revenue slightly above expectations at $13.7 billion, driven by strong data center AI (DCAI) demand and traditional server sales, the firm said the company’s outlook remains challenged.
Jefferies pointed to continued share loss in the cloud, a lack of a clear AI strategy, and delayed margin recovery tied to the 18A process ramp and sales of Arrow and Lunar Lake.
“While this may be the bottom for the year, we don’t see this as a turning point for the company, and remain on the sidelines,” analysts wrote.
Bank of America also maintained an Underperform rating with a $40 price target, cautioning that Intel’s stock had already priced in a potential turnaround that the company may be unable to deliver. Analysts noted strong server CPU demand boosted by AI workloads and enterprise refresh cycles, but said earnings per share would remain below $1 through 2028 due to incremental capex for external foundry customers, competition from ARM-based servers, and structural business model constraints.
“(I)n our view the stock is well ahead of Intel's capability to deliver a competitive/profitable business model,” BofA analysts noted.
Wedbush echoed the cautious sentiment, keeping a Neutral rating and a $30 price target. Analysts said investor expectations had outpaced reality, with supply constraints continuing to weigh on sales. “The stock was clearly anticipating substantially more, and while rolling out 18A/Panther Lake is a positive step, it is still very difficult to properly model the expected longer-term benefit,” Wedbush analysts wrote.
Friday’s sell-off reflects a broader investor recalibration following Intel’s report, as analysts weigh near-term operational headwinds against potential long-term gains from AI, advanced packaging, and foundry expansion.