Intel Corporation, trading on NASDAQ as INTC, reported commendable financial results for its fourth quarter, with revenues reaching $13.7 billion and earnings per share (EPS) clocking in at $0.15. These figures exceeded the Wall Street consensus estimates, which were $13.4 billion in revenue and $0.09 EPS. The data center division notably outperformed expectations, generating approximately $4.7 billion in revenue—over $400 million higher than estimates—driven primarily by elevated demand linked to artificial intelligence infrastructure deployments.
Despite these positive fourth-quarter outcomes, Intel’s guidance for the first quarter of 2026 reflects a more cautious outlook. The company anticipates revenue of $12.2 billion, earnings per share breaking even at $0.00, and gross margins contracting to 34.5%. These projections fall short of the Street’s estimates of $12.6 billion in revenue, $0.07 EPS, and a 36.5% gross margin. The firm attributes this outlook to persistent supply constraints and strategic prioritization of server product shipments over client segments.
Analysts at Bernstein have expressed their view that Intel significantly underestimated the server market cycle, leaving its capacity footprint substantially unprepared for the current demand surge. Although the ramp-up of Intel’s 18A chip production line is progressing as planned, it is expected to remain margin dilutive for most of 2026. Supply bottlenecks are foreseen to ease progressively, which could favor above-seasonal growth beyond the first quarter and support double-digit growth in the data center segment over the full year.
On the downside, elevated prices for memory and other components pose risks to the client market segment, potentially dampening demand. This dual scenario underscores a complex operating environment where supply recovery and cost inflation interplay.
Additional analyst responses to Intel’s latest disclosures have been varied. Benchmark has raised its price target to $57 while maintaining a Buy rating, and Truist Securities increased its target price to $49, holding a Neutral rating. Conversely, Rosenblatt Securities, despite a Sell rating, increased its price target to $30, recognizing operational improvements. TD Cowen maintains a Hold rating with a $50 price target, noting that recent stock gains are driven more by optimistic narratives than concrete fundamentals. Meanwhile, Cantor Fitzgerald sustains a Neutral rating with a $45 price target, expressing surprise at Intel’s significant stock price appreciation year-to-date.
These differing analyst perspectives reflect ongoing debate about Intel's near-term trajectory amid supply chain issues and investment in new manufacturing capabilities. The company’s ability to navigate these challenges will remain a focal point for investors and industry watchers alike.