Slacking Sales Trouble US Chip Maker: Intel Faces the Red
Stocks have experienced a drop for Intel Corporation, resulting in a decline in its value.
Intel, the US chipmaker, is grappling with a steep decline in sales due to flagging PC demand. This rough patch is evident from Intel's disappointing quarterly performance and a cautious outlook, resulting in a seven percent drop in its stock price following the news.
In Q1 2025, Intel's revenue dipped by 28% compared to the previous year, hitting $14.0 billion, with adjusted earnings per share sliding to $0.10. The company fell short of analysts' expectations, who had predicted $14.5 billion in revenue and earnings of $0.20 per share.
For Q2 2025, Intel anticipates revenue to range between $10.5 and $11.5 billion—a significant drop from the forecasted $13.9 billion. Instead of the previously expected adjusted earnings of $0.24 per share in the first quarter, the company now projects a loss of $0.15.
Intel's CEO, Pat Gelsinger, shared with Reuters that the company is bracing for one of the industry's largest inventory write-downs, casting a shadow over the current quarter's expectations.
Following the news, analysts at Bank of America and JP Morgan have revised their price targets, with Bank of America lowering its target from $28 to $25, and JP Morgan reducing it from $32 to $28.
Börse Online downgraded Intel's title to "Watch" in August and continues to favor Intel's competitor AMD.
Although Q2 2025 projections are lackluster, Intel's foundry division's performance and cost-cutting measures provide hope for long-term recovery. Yet, the "elevated uncertainty" cited by CFO David Zinsner continues to loom over near-term expectations.
Insights: While Q1 2025 revenue remained flat compared to the previous year, Intel's Q2 2025 revenue forecast of $11.2B–$12.4B and projected non-GAAP EPS of $0.00 fell short of estimates, leading to a 5% after-hours stock drop. The company has announced plans to reduce operating expenses to $17B in 2025 and $16B in 2026. The average 2025 EPS forecast shows a loss of $0.13 per share, improving from 2024's $0.85 loss. The average 12-month price target is $22.23, ranging from $14 to $34. While analyst sentiment remains cautious, the foundry division's performance and cost discipline are seen as potential drivers for long-term recovery.
- Intel, the US chipmaker, expects a loss of $0.15 in adjusted earnings per share for Q2 2025, downgraded from the previously expected $0.24, which led to a seven percent drop in its stock price.
- Analysts at Bank of America and JP Morgan have revised their price targets for Intel, with Bank of America lowering its target from $28 to $25, and JP Morgan reducing it from $32 to $28.
- The finance company Börse Online downgraded Intel's title to "Watch" in August, and continues to favor Intel's competitor AMD.
- Despite the lackluster Q2 2025 projections, Intel's foundry division's performance and cost-cutting measures provide hope for long-term recovery.
