Intel Shares Under Pressure as Manufacturing Hurdles Mount

Intel US4581401001

Intel continues to face significant turbulence. A sustained sell-off, fueled by company-specific operational issues, is plaguing the semiconductor giant's stock following a severe decline late last week. The core problem is an inability to meet market demand, compounded by a shocking forecast of virtually zero profit for the current quarter. This situation forces investors to assess the true depth and duration of the company's manufacturing challenges.

The immediate catalyst for the renewed pressure was a deeply disappointing outlook. For the first quarter of 2026, management projected earnings per share of approximately $0.00—effectively breakeven at the operating level. Furthermore, revenue is expected to fall to a range between $11.7 billion and $12.7 billion. This bleak projection starkly contrasts with the company's fourth-quarter 2025 performance, where revenue of $13.67 billion slightly exceeded market expectations.

Chief Financial Officer David Zinsner attributed the difficulties to "acute internal supply constraints," confirming the company lacks sufficient production capacity to fulfill existing customer orders. This admission sent shares tumbling an additional 5.7% on Monday to close at $42.49. This decline extended the sharp drop from the previous Friday, when the stock had plunged as much as 20% immediately after the quarterly figures were released.

Analyst Community Highlights Production Risks

Financial institutions were quick to respond to the confirmed supply chain issues. Citigroup adjusted its stance slightly, lowering its price target from $50 to $48 while maintaining a neutral rating. DZ Bank offered a more critical view. Although it raised its fair value estimate to $36, the firm reiterated its "Sell" recommendation. Analyst Ingo Wermann explicitly pointed to production problems and defect rates in chips utilizing new processor architectures as key concerns.

These manufacturing woes are now the dominant narrative for Intel, overshadowing other segments. Notably, the company's Data Center & AI division posted growth of approximately 9% in the last quarter, but this positive development was eclipsed by the broader capacity concerns.

A Timeline for Recovery in Question

Company executives have indicated they believe the supply issues will reach their lowest point during the current first quarter, with a gradual improvement expected to begin in the second quarter of 2026. However, the market remains skeptical. Whether Intel can adhere to this recovery timeline is widely seen as the pivotal factor that will determine the stock's trajectory in the coming months.

@ boerse-global.de | US4581401001 INTEL