Intel Stock Plummets 12% After Disappointing Earnings Report
Intel shares plunged 12% in premarket trading Tuesday after the chipmaker reported weaker-than-expected first-quarter earnings. The steep drop marks the company's worst single-day decline since October 2022 and erases nearly $20 billion in market value.
The Santa Clara-based company reported revenue of $12.3 billion for Q1 2026, missing analyst projections of $13.1 billion. CEO Pat Gelsinger attributed the shortfall to "continued softness in the PC market" and slower adoption of its latest server processors.
Investors reacted swiftly to the disappointing results, with trading volume spiking to three times the daily average before markets opened. The selloff dragged down other semiconductor stocks, including AMD and Nvidia, which fell 3% and 2% respectively in early trading.
Intel's struggles come amid fierce competition in both consumer and data center markets. The company has been losing market share to AMD in CPUs while facing pressure from Nvidia in AI accelerators. Analysts note Intel's manufacturing delays have compounded these challenges.
"This quarter confirms our concerns about Intel's execution," said Bernstein analyst Stacy Rasgon. "They're getting squeezed on all sides while trying to fund their expensive turnaround strategy."
The earnings miss comes at a critical moment for Intel, which is investing heavily in new U.S. chip factories as part of its IDM 2.0 strategy. The company recently secured $8.5 billion in CHIPS Act funding but now faces questions about its ability to compete technologically.
Retail investors appear particularly rattled, with Intel trending as the most discussed stock on Reddit's WallStreetBets forum Tuesday morning. Many posters expressed frustration with the company's repeated delays in delivering next-generation processors.
Intel maintained its full-year revenue guidance of $58-62 billion, but several analysts downgraded the stock following the report. The company now trades at its lowest price-to-earnings ratio since 2015, reflecting growing skepticism about its recovery timeline.
The chipmaker's next major test comes in June when it launches its Arrow Lake desktop processors. Success with this product line could help stabilize investor confidence after today's brutal market reaction.
