Intel Corporation (INTC.US) warns of weakness in guidance and supply shortages, stock price plunges over 17% for its worst single-day performance in nearly a year and a half.

Intel Corporation (INTC.US) plunged more than 17% on Friday, as the company's performance guidance fell short of market expectations and warned of potential supply shortages in the future. The stock recorded its worst single-day drop since August 2024. During the fourth quarter earnings conference call held on Thursday, Intel Corporation CEO Pat Gelsinger admitted that the company's current capacity and efficiency still cannot meet all market demands. "We are in a transformation journey that will take years," Gelsinger said. "This will require time and determination." He also pointed out that the company's production efficiency (yield) is still below its target level. Intel Corporation expects first quarter revenue in 2026 to be between $11.7 billion and $12.7 billion, with adjusted earnings per share approaching break-even. This forecast is significantly lower than market expectations. According to LSEG data, Wall Street originally expected Intel Corporation to have earnings per share of around $0.05 in the first quarter, with revenue of around $12.51 billion. The weak outlook has raised concerns among investors, as Intel Corporation continues to struggle in the semiconductor competition driven by the AI wave. Despite the unexpected drop this time, Intel Corporation's stock price has more than doubled over the past year, with the market having high hopes for a "turnaround". Driving factors include government investment support in the United States, as well as the backing of SoftBank and capital forces such as NVIDIA Corporation (NVDA.US). However, the company's long-term underperformance in the wafer outsourcing business remains a key drag. Compared to competitors who have made significant gains in data center AI demand eruption, Intel Corporation's outsourcing department has yet to make a clear breakthrough. One of the current focuses of the market is whether Intel Corporation's advanced process "14A" technology can attract large-scale outsourcing customers, becoming the next driving force for the stock price. Intel Corporation CFO David Zinsner told the media that the company expects customers for the 14A technology to gradually emerge in the second half of this year. However, analysts at RBC Capital Markets warned that "substantial revenue contribution" from 14A customers may not appear until the end of 2028. Jefferies analysts are even more cautious, pointing out that Intel Corporation still faces issues such as continued market share losses, lack of a clear AI strategy, and unclear opportunities in advanced packaging and manufacturing. The analysts wrote, "We understand the recent market excitement about opportunities for Intel Corporation, but we still do not see a clear path forward." It is worth noting that despite the weak outlook, Intel Corporation's fourth quarter earnings and revenue both exceeded Wall Street expectations. Against the backdrop of the semiconductor industry's heavy reliance on AI growth narrative, investors are obviously more concerned about future growth momentum. Analysts believe that whether Intel Corporation can achieve breakthroughs in its outsourcing business and advanced processes in the next few years will determine whether its transformation can truly succeed.