Intel shares tumbled more than 12% in after-hours trading on Thursday after the company released its latest earnings report, as CEO Pat Gelsinger delivered a lacklustre outlook and warned that the chipmaker is grappling with manufacturing problems.

The results showed that Intel’s revenue for Q4 2025 fell 4.1% year-on-year to USD 13.7 billion, beating analysts’ expectations of USD 13.4 billion. Adjusted earnings per share came in at USD 0.15, also above the consensus estimate of USD 0.09.

By business segment, Client Computing Group (CCG) revenue for the fourth quarter was USD 8.2 billion, down 6.6% from a year earlier and slightly below the Street’s average forecast of USD 8.3 billion. Data Center and AI (DCAI) revenue rose 8.9% year-on-year to USD 4.7 billion. Intel Foundry revenue reached USD 4.5 billion, up 3.8% from a year earlier. For now, almost all of this division’s orders still come from Intel’s own product groups, but the company is actively pursuing external customers.

For Q1 2026, Intel guided revenue in a range of USD 11.7–12.7 billion, with the midpoint coming in below analysts’ estimate of USD 12.6 billion. The company expects adjusted earnings per share to be roughly breakeven, while the market had been looking for USD 0.08.

Intel’s revenue and profit forecasts for the first quarter of 2026 were well under Wall Street’s expectations. Gelsinger said that turning the company around would take time and resolve, a comment that further weighed on the share price. Bottlenecks in the manufacturing process are hampering Intel’s recovery efforts, disappointing investors who had hoped new products would deliver a much stronger boost.

Intel is currently struggling with subpar manufacturing yields, making it harder for the company to meet order demand. The once-dominant chipmaker has spent years trying to regain its technological edge and win back lost market share, and this latest setback underscores how difficult that journey remains.

Previously, Intel had been riding a wave of optimism on Wall Street. In recent months, investors had piled into the stock, betting that new products would further improve the company’s financial performance. Intel also attracted backing from heavyweight investors, including the US government, Nvidia and SoftBank.

Market Commentary:

The market had long been hoping that Intel was approaching an inflection point, but hearing that yield issues remain stubbornly unresolved is clearly not a good start. It exposes the company’s core dilemma: demand is finally picking up, but supply is now the binding constraint. Management has indicated that available shipment capacity will trough in the first quarter and only begin to improve gradually in the second quarter.