Intel Stock Falls After-Hours Following Disappointing Q2 Forecast Despite Revenue Beat

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•  24 Apr 2025
 

Intel Corp ($INTC), the U.S. chipmaking giant, saw its shares drop by over 6% in after-hours trading on Thursday, following the release of a disappointing second-quarter forecast that overshadowed its first-quarter revenue beat.

For Q1 2025, Intel reported earnings per share (EPS) of just $0.13—sharply below Wall Street expectations of $0.74. However, revenue came in at $12.67 billion, beating estimates of $12.31 billion.

Despite the top-line beat, the market reacted strongly to Intel’s weak earnings guidance. The company projected Q2 revenue between $11.2 billion and $12.4 billion, significantly below analysts’ consensus of $12.82 billion. Intel expects break-even adjusted EPS for the upcoming quarter, while analysts were looking for $0.06 per share.

The lackluster guidance came as newly appointed CEO Lip-Bu Tan made his debut amid heightened trade tensions between the U.S. and China—a critical issue for chipmakers. China, traditionally Intel’s largest market, recently imposed tariffs of 85% or more on U.S.-made semiconductors, severely affecting the company’s sales outlook.

CFO David Zinsner acknowledged the "increased macroeconomic uncertainty" affecting the entire chip industry, which is reflected in the company’s cautious outlook. In response, Intel is doubling down on restructuring.

Operational expense target has been revised down to ~$17 billion for 2025, from $17.5 billion previously.

Capex target for 2025 has also been reduced from $20 billion to $18 billion, with a further decrease to $16 billion in 2026.

Intel emphasized that it’s working to streamline its business, eliminate management layers, and push for more efficient execution. These initiatives align with Intel’s broader strategy to become a leading contract chip manufacturer, a vision set in motion by former CEO Pat Gelsinger.

While Intel continues to invest heavily in building next-gen manufacturing facilities, the company is under growing pressure to regain its edge in the booming AI chip market. Competitors like NVIDIA and AMD have surged ahead, capturing significant mindshare and market value.

To make matters worse, the geopolitical backdrop isn’t helping. Even though President Donald Trump has not yet imposed tariffs on U.S. chips, China’s aggressive tariffs are already taking a toll. China imports $10 billion worth of chips from the U.S. each year—$8 billion of that in Intel CPUs alone.

With no quick fixes in sight, Lip-Bu Tan faces a difficult path ahead: revive Intel’s growth engine, fend off AI rivals, and navigate a complex and deteriorating trade environment.

Stay tuned as we track whether Intel can execute its turnaround strategy—or if it risks falling further behind in one of the most critical tech races of our time.