Intel just pulled the ultimate Wall Street magic trick: beat expectations, then watched its stock crater 13% anyway.
The company reported solid Q4 results yesterday, but investors panicked over weak guidance for Q1. CEO Lip-Bu Tan blamed supply constraints - Intel literally can’t make enough chips to meet demand. Yields on their new manufacturing process “are still below what I want them to be.”
This is the inflection point for the greatest comeback story (or greatest value trap) in tech. Intel was left for dead 18 months ago - stock down 60%, CEO fired, hemorrhaging market share to AMD, completely missing the AI boom. Then came $16 billion in rescue money from the US government, Nvidia, and SoftBank.
Now the question: Is Intel back? Or is this a dead cat bounce before the final decline?
Here's how the community voted
First to next-gen manufacturing - Intel’s 18A process beat TSMC to market with backside power delivery, boosting chip speed 6% at the same power. TSMC’s answer doesn’t arrive until late 2026.
America’s chip champion - US government took a 10% stake ($8.9B), Nvidia invested $5B and is co-developing chips, SoftBank added $2B. Intel is now the only US company that can manufacture leading-edge chips domestically.
Demand is outrunning supply - KeyBanc reports server chips sold out for 2026. Data center revenue up 15% QoQ. Weak Q1 guidance reflects supply constraints, not demand - management says supply improves each quarter.
Foundry is a money pit - $2-3B in operating losses per quarter. Apple, Nvidia, AMD, Qualcomm all still rely on TSMC for volume production. Intel is building factories for customers who haven’t shown up.
AMD keeps winning - Intel’s server share fell from 94% (2020) to 73% today and dropping. AMD’s chips offer better performance-per-watt. Intel has acknowledged it needs to “close gaps in the high-end desktop space.”
Priced for a turnaround that hasn’t happened - Stock up 150% from lows before 18A has proven commercial viability, before a single major foundry customer commits. All the good news is out - now Intel has to deliver.
First to next-gen manufacturing - Intel’s 18A process beat TSMC to market with backside power delivery, boosting chip speed 6% at the same power. TSMC’s answer doesn’t arrive until late 2026.
America’s chip champion - US government took a 10% stake ($8.9B), Nvidia invested $5B and is co-developing chips, SoftBank added $2B. Intel is now the only US company that can manufacture leading-edge chips domestically.
Demand is outrunning supply - KeyBanc reports server chips sold out for 2026. Data center revenue up 15% QoQ. Weak Q1 guidance reflects supply constraints, not demand - management says supply improves each quarter.
Foundry is a money pit - $2-3B in operating losses per quarter. Apple, Nvidia, AMD, Qualcomm all still rely on TSMC for volume production. Intel is building factories for customers who haven’t shown up.
AMD keeps winning - Intel’s server share fell from 94% (2020) to 73% today and dropping. AMD’s chips offer better performance-per-watt. Intel has acknowledged it needs to “close gaps in the high-end desktop space.”
Priced for a turnaround that hasn’t happened - Stock up 150% from lows before 18A has proven commercial viability, before a single major foundry customer commits. All the good news is out - now Intel has to deliver.
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Intel should be able to harvest strong cash flows even if it's primed for a demise. I feel the really long term (30+ year trajectory) was put in place back with the creation of the iPhone and iPad, because it was the exact right moment to begin development of a new ecosystem based around ARM's RISC architecture. It was the right moment because you had a new form of computing where you had no legacy software issues. Intel had explored RISC long ago (read Andy Grove's 1996 book for details) but got pushback from the computer manufacturers like Dell, HP, etc. They saw how much of a challenge it would be for developers, consumers, etc. I had felt that by 2011 or 2012, the writing was on the wall for Intel, because this alternative ecosystem was quietly building up with Apple improving the A series processors, which led to the M1 in 2020, and they had developers writing software for the iPhone and iPad already. The whole infrastructure was getting built out.
Apple was probably the only one who could really pull this off and they did it, and it led efforts by others to now get other operating systems working on ARM processors.
While I believe the "writing is on the wall" for Intel, I think it will be very, very slow to occur. Intel should be able to maintain its dominant position and harvest cash flows, but it's tricky, because you have to run a dying business, which most societies and leaders aren't looking to do - it involves job cuts for the people, raising prices to offset lost volumes, and so on.
At the right price, knowing how critical their CPU is and how slow its demise is likely to be (think about how 40+ year old code still runs in enterprises... if they couldn't get rid of that, how will they replace their intel CPUs?), Intel can be a reasonable investment even without improvement. But at today's prices, it seems like it's already baked in, and I don't think they're likely to run it *that well* from the long term shareholder's perspective.
I think it's a long-term dud, but I'd still buy it if it were cheap enough.
Some very sound thinking here IMHO. I am less sceptical though. If they're still able to get an edge on TSMC today, then they're not dead yet.
The server business isn't going anywhere and seems surely to keep growing. They've got plenty of resources to engineer a turnaround.
I'm not gonna rush to buy, but happy to take the flip side of the vote.