Intel Supply Crunch Halts Market Momentum as Shares Plunge

2026-01-24 economy

New York, Saturday, 24 January 2026.
Markets stalled as Intel plunged over 13% on a weak 2026 outlook. Critically, despite $20 billion in recent external funding, the chipmaker cannot manufacture enough CPUs to meet surging AI data center demand.

A Disconnect Between Demand and Delivery

The market’s visceral reaction on Friday, January 23, 2026, which saw Intel shares plummet 17% in their worst single-day performance since August 2024 [3], highlights a critical operational paradox. While the company reported fourth-quarter revenue of $13.7 billion—surpassing analyst expectations of $13.4 billion [4]—the narrative quickly shifted to its inability to fulfill orders. During the earnings call on Thursday, January 22, CFO David Zinsner revealed that the company’s buffer inventory is effectively “depleted,” creating acute internal supply constraints [7]. This bottleneck is particularly severe in the server chip segment used for AI data centers, where Intel struggled to satisfy surging demand [6]. Consequently, the company provided a soft outlook for the first quarter of 2026, projecting revenue between $11.7 billion and $12.7 billion [2], with a midpoint of 12.2 billion dollars. This falls significantly short of the $12.51 billion anticipated by analysts [6].

The High Cost of Transformation

Despite the immediate supply challenges, Intel’s full-year 2025 financials reflect a company in the midst of a painful but stabilizing restructuring. Full-year revenue stood at $52.9 billion, which, while technically flat year-over-year [2], represents the company’s weakest revenue performance since 2010 [8]. However, the bottom line tells a story of aggressive loss mitigation. Intel reported a GAAP net loss of $300 million for 2025, a dramatic improvement from the staggering $18.8 billion loss recorded in 2024 [8]. This stabilization was heavily bolstered by $20.4 billion in external financial injections throughout 2025, including $8.9 billion from the U.S. government, $2 billion from SoftBank, and a strategic $5 billion investment from Nvidia [8]. Even with this capital influx, the company expects to post a GAAP loss per share of $(0.21) in the first quarter of 2026 [2].

Looking Toward the 18A and 14A Horizon

The path to recovery relies heavily on Intel’s manufacturing roadmap, which remains under intense scrutiny. CEO Lip-Bu Tan acknowledged that while yields for the 18A process are aligning with internal plans, they remain below his personal targets [7]. The timeline for the next-generation 14A technology also suggests a long wait for investors; volume production is not scheduled until 2028 [7], with customers expected to secure capacity only in the second half of 2026 [3]. In the interim, Intel faces a difficult start to the year. Management has indicated that the first quarter of 2026 will likely mark the “trough” for supply availability, with improvements largely dependent on factory network adjustments expected to take effect in the second quarter [7]. Until then, the disconnect between the AI sector’s insatiable demand and Intel’s manufacturing limitations continues to weigh heavily on market sentiment.

Sources

Stock Market Intel