Can Support Hold INTC Stock as Intel’s Soft Q1 Outlook Overshadow Earnings Beat?
Despite Intel's strong fourth-quarter earnings beat, the stock saw a steep sell-off due to cautious outlook for early 2026.
Quick overview
- Intel reported strong fourth-quarter earnings, exceeding expectations in earnings, revenue, and margins, indicating operational progress.
- Adjusted earnings per share were $0.15, and revenue reached $13.67 billion, reflecting improved execution across core businesses.
- Despite the positive Q4 results, Intel's cautious guidance for Q1 led to an 18% drop in stock price, highlighting concerns over near-term demand.
- The mixed performance across business segments, particularly in Datacenter & AI and Client Computing, suggests an uneven recovery trajectory.
Live INTC Chart
[[INTC-graph]]
Despite Intel’s strong fourth-quarter earnings beat, the stock saw a steep sell-off due to cautious outlook for early 2026.
Earnings Beat Highlights Operational Progress
Intel’s December-quarter results offered clear evidence that its operational reset is beginning to show through the numbers. The company exceeded expectations across earnings, revenue, and margins, reinforcing confidence that recent restructuring efforts and cost discipline are gaining traction.
Adjusted earnings per share came in at $0.15, comfortably ahead of consensus forecasts. Revenue reached $13.67 billion, also topping estimates and reflecting improved execution across Intel’s core businesses. For investors focused on the turnaround story, the earnings beat helped validate management’s efforts to stabilise performance after several difficult years.
INTC Chart Daily – Massive Bearish Reversal
Margins Surprise to the Upside
Margins were one of the most encouraging aspects of the quarter. Adjusted gross margin rose to 37.9%, well above market expectations, while adjusted operating margin reached 8.8%, also beating forecasts. These improvements point to better cost control, manufacturing efficiency, and operational discipline—key pillars of Intel’s long-term recovery strategy.
After an extended period of margin compression driven by heavy investment and restructuring, the latest figures suggest Intel is starting to regain some balance between spending and profitability.
Segment Results Show Mixed Demand Signals
Performance across business segments was uneven but generally supportive. Datacenter & AI revenue climbed to $4.74 billion, exceeding expectations and highlighting resilient demand for compute and AI-related workloads despite intense competition from rivals. This segment remains central to Intel’s growth narrative as AI adoption accelerates.
Intel Foundry revenue also surprised to the upside at $4.51 billion, signalling early progress in the company’s ambition to become a major contract manufacturer. While still loss-making, the segment’s momentum is closely watched as a long-term strategic pillar.
Client Computing revenue, however, came in slightly below forecasts at $8.19 billion. The result reflects ongoing weakness in the PC market, with enterprise and consumer demand remaining cautious amid a slower upgrade cycle.
Weak Q1 Guidance Triggers Sharp Sell-Off
Despite the solid Q4 performance, Intel’s outlook for the March quarter disappointed markets. The company guided to breakeven adjusted EPS, below consensus expectations, and projected revenue of $11.7 billion to $12.7 billion, signalling softer near-term demand.
Intel also warned that adjusted gross margin is expected to fall to 34.5%, pointing to renewed margin pressure as volumes ease and investment spending continues. That guidance proved decisive, sending Intel shares down roughly 18% on Friday as investors recalibrated near-term expectations.
Technical Levels Come Back Into Focus
The negative reaction erased a recent technical breakout. Intel shares had pushed up to $54.60 before the earnings release but opened sharply lower following the guidance update, slipping below $45. Near-term support now sits around $44.50, followed by $42.50 and then $40, levels that will be closely monitored by traders.
INTC Chart Monthly – Will Moving Averages Turn Into Support?
Outlook: Progress, But Recovery Remains Uneven
Intel’s latest results underline a company making genuine operational progress, particularly on margins and execution. However, the softer Q1 outlook reinforces that the turnaround is unlikely to be linear. Near-term sentiment remains highly sensitive to execution in Datacenter & AI and continued momentum in the foundry business as Intel works to rebuild confidence through 2026.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save