Intel Corporation reported fourth-quarter 2025 earnings on Wednesday evening that exceeded Wall Street expectations across revenue, gross margin, and earnings per share. However, the brief celebration was cut short when the struggling chipmaker issued disappointing guidance for the first quarter of 2026, sending shares tumbling as much as 13% in extended trading.

Better-Than-Expected Q4 Results

For the fourth quarter, Intel reported adjusted earnings of 15 cents per share, significantly beating the 8-cent consensus estimate compiled by LSEG. Revenue came in at $13.7 billion, also topping analyst expectations of $13.4 billion, though still representing a 4.1% decline from the same period a year ago.

The results marked a relative bright spot for Intel, which has been navigating a difficult period as it attempts to regain competitiveness in the semiconductor industry. Gross profit reached $4.9 billion, down 11.5% year-over-year, while operating profit improved 40.8% to $580 million.

"We exceeded Q4 expectations across revenue, gross margin, and EPS even as we navigated industry-wide supply shortages."

— David Zinsner, Intel Chief Financial Officer

Cash from operating activities surged 35.5% to $4.3 billion, while cash and cash equivalents on the balance sheet climbed nearly 73% to $14.3 billion, providing the company with substantial financial flexibility as it executes its turnaround strategy.

Q1 Guidance Falls Short

The positive quarterly results were overshadowed by Intel's outlook for the first quarter. The company guided for revenue between $11.7 billion and $12.7 billion, with breakeven adjusted earnings per share. This came in well below analyst expectations of 5 cents EPS on $12.51 billion in revenue.

CFO Zinsner told CNBC that the soft guidance was partially attributable to supply constraints that have prevented Intel from meeting seasonal demand. The company lacks sufficient inventory of certain products to capitalize on what is typically a stronger period for PC and data center sales.

CEO Strikes Optimistic Tone

Despite the near-term challenges, newly appointed CEO Lip-Bu Tan expressed confidence in Intel's long-term positioning within the artificial intelligence ecosystem.

"Our conviction in the essential role of CPUs in the AI era continues to grow. We delivered a solid finish to the year and made progress on our journey to build a new Intel."

— Lip-Bu Tan, Intel Chief Executive Officer

Tan, who took the helm in late 2025 after the departure of Pat Gelsinger, has been working to reshape Intel's strategic priorities while maintaining the company's ambitious manufacturing investments. The company has staked much of its future on reclaiming semiconductor manufacturing leadership through massive fab construction projects in Ohio, Arizona, and Germany.

Net Loss Continues

While Intel showed improvement in several key operating metrics, the company still recorded a net loss attributable to common shareholders of $591 million for the quarter. However, this represented a 369% improvement compared to the year-ago period, indicating progress in the company's restructuring efforts.

The ongoing losses reflect the massive investments Intel is making in its foundry business and next-generation manufacturing processes. The company has committed tens of billions of dollars to building new fabrication facilities as it attempts to catch up with Taiwan Semiconductor Manufacturing Company and Samsung in advanced chip production.

Market Reaction and Analyst Views

Intel shares, which had rallied nearly 30% since the start of 2026 on optimism around the turnaround story, gave back a significant portion of those gains in after-hours trading. The sharp decline reflects investor concern that the company's recovery may take longer than anticipated.

The chipmaker's stock has been on a volatile ride over the past year as investors weigh the potential rewards of its ambitious manufacturing strategy against the execution risks and near-term financial pressures. With shares still down substantially from their 2021 highs, Intel remains a show-me story for many investors.

What Comes Next

Intel faces a critical 2026 as it works to ramp up production of its Intel 18A process technology, which the company hopes will allow it to win back customers who have migrated to TSMC and other foundries. The company is also banking on growth in AI PC processors and data center products to help stabilize revenues while its foundry business matures.

For investors, the disconnect between the better-than-expected Q4 results and the weak Q1 guidance underscores the challenging path ahead. While Intel has made progress on its operational execution, the soft near-term outlook suggests that meaningful financial improvement may still be several quarters away.