Intel’s fundamental weakness is deepening – its stock faces the risk of further decline

Another loss-making quarter, a disappointing Q2 2025 forecast, and weakening demand for AI-enabled processors continue to weigh on Intel’s stock, putting the share price at risk of falling below the 19 USD mark.

In Q1 2025, Intel Corp. (NASDAQ: INTC) reported revenue of 12.67 billion USD and adjusted earnings per share of 0.13 USD, exceeding analysts’ expectations. However, under GAAP standards, the company posted a loss of 0.19 USD per share – marking its fourth consecutive quarter in the red. Robust demand for the older Raptor Lake processors supported the results, while newer AI-enabled lines – Meteor Lake and Lunar Lake – faced sluggish demand and pressure on profitability. Intel shares dropped by more than 8% due to concerns over narrowing margins amid the launch of Lunar Lake, the weak forecast, and the slow adoption of the new processor architectures.

The article examines Intel’s stock performance, the reasons behind its decline, and whether it presents a buying opportunity. It includes a fundamental analysis of Intel’s financial report and a technical analysis of INTC shares, forming the basis for Intel’s 2025 stock forecast.

About Intel Corp.

Intel Corp. is a US technology company specialising in developing and producing microprocessors, chipsets, GPUs, systems-on-a-chip (SoC), network controllers, modems, flash memory, Wi-Fi and Bluetooth chipsets, and sensors for vehicle automation. Founded in 1968 by Gordon Moore and Robert Noyce, Intel introduced the world’s first microprocessor in 1971, laying the groundwork for its future success.

In the same year, Intel held its initial public offering (IPO) on the NASDAQ under the ticker symbol INTC, becoming one of the first companies in the emerging technology sector.

Challenging times for Intel: the dot-com bubble, the pandemic, and competitive struggles

The company faced its first major setback during the dot-com bubble in 2000, as demand for PCs and servers plummeted. Management increased production, not predicting the downturn, leading to an oversupply, and falling prices. As a result, Intel was compelled to scale back production, cut costs, and develop a recovery program. Following the crisis, the technology market rebounded, reviving demand for Intel’s products and helping the company recover from the downturn.

The next major test came in 2021. A surge in demand for semiconductor products during the COVID-19 pandemic in 2020 drove increased production, leading to market oversaturation and a subsequent drop in prices, which, in turn, hit Intel’s revenue. However, the company’s challenges did not end there.

In 2023, Intel faced fierce competition from AMD and NVIDIA, whose products outperformed Intel’s processors and graphics solutions in both performance and energy efficiency. A key factor behind this loss of competitiveness was the previous management’s focus on business strategy and financial performance at the expense of engineering investment, leading to delays in transitioning to more advanced 7- and 5-nanometre technologies – already mastered by Taiwan Semiconductor Manufacturing Company (NYSE: TSM), which produces chips for NVIDIA and AMD.

Investors’ reaction to the company’s difficulties was obvious – they sold off Intel shares. During the 2000 dot-com crisis, the company’s stock plunged by 82%. The current situation is similar, with the stock losing 70% of its value between its peak in April 2021 and November 2024.

Intel is increasing investments in new factories and equipment upgrades for foundry operations to restore investor confidence and defend its market share. This strategy temporarily reduces profitability (the company ended 2024 with a loss). Intel’s management plans to lay off up to 15% of its workforce to reduce costs.

Intel Corp. Q3 2024 report

Intel released its Q3 2024 report on 31 October, revealing the following key financial indicators:

• Revenue: 13.3 billion USD (-6%)
• Net income (loss): 2.0 billion USD compared to 1.7 billion in Q3 2023
• Earnings (loss) per share: 0.46 USD compared to 0.41 USD in Q3 2023
• Gross Margin: 18.0% (-2,780 basis points)

Revenue by segment:

• Client Computing Group: 7.3 billion USD (-7%)
• Data Center and AI: 3.3 billion USD (+9%)
• Network and Edge: 1.5 billion USD (+4%)
• Intel Foundry: 4.4 billion USD (-8%)
• All other: 1.0 billion USD (-28%)

In her comments on the report, Intel’s CEO, Pat Gelsinger, noted that the company’s profitability was impacted by expenses previously mentioned during the Q2 2024 results discussion. However, the actual results exceeded expectations. In Q3, Intel took significant steps to reduce costs, improve efficiency, and strengthen its market competitiveness. A substantial part of the workforce reduction program was also implemented, with plans to lay off an additional 15% of employees by the end of 2024.

The financial results were also impacted by write-offs of outdated products from the COVID-19 period, as these could not be integrated into current products.

Management had an optimistic outlook for Q4 2024. Revenue was projected in the 13.3-14.3 billion USD range, with adjusted EPS at 0.12 USD, reinforcing the possibility of the company returning to profitability.

Despite the current losses, Intel is encouraging shareholders to retain their shares and has paid a Q3 dividend of 0.12 USD per share.

Intel Corp. Q4 2024 report

On 30 January, Intel published its Q4 2024 report with the following key figures:

• Revenue: 14.3 billion USD (-7%)
• Net income (loss): (126) million USD compared to income of 2.7 billion in Q4 2023
• Earnings (loss) per share: (0.03) USD compared to earnings of 0.63 USD in Q4 2023
• Gross margin: 32.9% (-650 basis points)

Revenue by segment:

• Client Computing Group: 8.0 billion USD (-9%)
• Data Center and AI: 3.4 billion USD (-3%)
• Network and Edge: 1.6 billion USD (+10%)
• Intel Foundry: 4.5 billion USD (-13%)
• All other: 1.0 billion USD (-20%)

For Q1 2025, Intel projected revenue in the 11.7-12.7 billion USD range and a loss of 0.27 USD per share. The gross margin was expected at 36%, down from 51% in Q1 2024.

Q4 2024 marked the first financial quarter under the interim co-presidency of David Zinsner and Michelle Johnston Holthaus following the departure of Pat Gelsinger. Michelle Holthaus noted that the last quarter represented a positive step forward, as Intel exceeded its forecasts for revenue, gross margin, and EPS. She emphasised the progress in executing the cost-cutting plan aimed at supporting the company’s recovery. David Zinsner stated that the plan had a positive impact, contributing to improved business efficiency, return on invested capital, and the company’s overall profitability.

Intel continues to move towards its foundry model by establishing Intel Foundry as a separate subsidiary. For Q1 2025, revenue from this division was expected to remain in line with Q4 2024 levels.

Despite positive elements in the company’s report, market participants reacted negatively to its release due to the anticipated decline in Intel’s revenues.

Intel Corp. Q1 2025 earnings report

On 25 April, Intel published its report for Q1 2025, which ended on 29 March. The key figures are presented below, compared with the same period in 2024:

• Revenue: 12.7 bn USD (0%)
• Net income (loss): 887 mn USD versus a loss of 437 mn USD in Q1 2024
• Loss per share: 0.13 USD versus a loss of 0.09 USD in Q1 2024
• Gross margin: 39.2% (-590 basis points)

Revenue by segment:

• Client Computing Group: 7.6 bn USD (-8%)
• Data Centre and AI: 4.1 bn USD (+8%)
• Intel Foundry: 4.7 bn USD (+3%)
• All other: 0.9 bn USD (+47%)

Intel’s Q1 2025 report delivered mixed results. On the one hand, the company exceeded revenue expectations; on the other, it reported a net loss of 821 million USD – its fourth consecutive quarterly loss.

Management issued a cautious forecast for Q2 2025. Revenue is expected to range between 11.2 billion and 12.4 billion USD, with a potential loss per share of up to 0.32 USD. These figures came in below Wall Street expectations. CFO David Zinsner attributed this caution to ongoing macroeconomic uncertainty, including trade tensions and potential new tariffs, which affected customer behaviour at the start of the year.

Under new CEO Lip-Bu Tan, Intel has embarked on a large-scale restructuring. Key measures include reducing management layers to speed up decision-making, introducing a four-day office working week to boost productivity, and cutting operating expenses to 17 bn USD in 2025 and 16 bn USD in 2026.

Nevertheless, the company continues to face serious challenges in the AI segment, where competitors Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD) maintain a strong lead. Intel’s AI initiatives – including its Gaudi accelerators – have so far failed to meet expectations, while plans for its Falcon Shores GPU have been scaled back.

Intel’s AI bet is falling short

Intel has been investing heavily in AI-enabled processors. However, demand for these chips has turned out to be significantly lower than expected. Consumers are increasingly opting for older models without AI functionality, such as the Intel Raptor Lake series. The reasons are straightforward – lower prices, proven performance, and a lack of tangible benefits from AI features in real-world applications.

As a result, Intel has faced an unexpected shortage of its older chips, with its manufacturing capacity currently focused on producing new AI processors. The company has had to acknowledge that sales of its latest Meteor Lake and Lunar Lake models are falling well short of expectations.

Historically, Intel has also struggled in the AI space. Previous acquisitions of AI startups such as Nervana and Habana Labs failed to produce meaningful breakthroughs. Now led by Lip-Bu Tan, the company is shifting its focus towards in-house development of AI solutions.

By contrast, AMD is prioritising high-performance processors with selective AI integration. It is launching Ryzen AI Max (Strix Halo) chips, which combine powerful CPUs and GPUs with AI capabilities aimed at applications, including gaming devices.

In the server segment, AMD has made significant strides with its Instinct MI300X accelerators, which have received strong endorsements from companies like Microsoft (NASDAQ: MSFT) for their impressive AI performance.

Intel continues to promote its AI-integrated chips, but market demand remains weak – users still prefer older, proven solutions, as they have yet to see significant benefits from the newer models. This has led to an unexpected shortage of legacy models and is forcing Intel to revise its production plans. Meanwhile, AMD remains focused on performance gains, integrating AI only where it adds clear value – a strategy helping it maintain its competitive edge.

Expert forecasts for Intel Corp. stock for 2025

• Barchart: one out of 36 analysts rated Intel Corp. stock a Strong Buy, 31 a Hold, four a Sell, and five a Strong Sell. The highest target price is 62 USD, while the lowest is 18 USD
• MarketBeat: of 31 experts, one assigned a Buy rating, 25 gave a Hold recommendation, and five a Sell. The highest target price is 34 USD, while the lowest is 14 USD
• TipRanks: one out of 33 professionals issued a Buy recommendation, 28 a Hold, and four a Sell. The highest target price is 28 USD, while the lowest is 14 USD
• Stock Analysis: one of 31 experts rated the stock a Buy, 26 a Hold, one a Sell, and three a Strong Sell, with the lowest target price of 14 USD. The highest target price is 36 USD

Intel Corp. stock price forecast for 2025

On the weekly timeframe, Intel’s stock is trading within a downward channel and testing support at 19 USD. On the MACD indicator, a break below this support would trigger a convergence, signalling a potential upward price movement. Based on the current Intel stock performance, the potential price movements in 2025 are as follows:

The primary forecast for Intel shares anticipates a break below the 19 USD support, followed by a decline to the lower channel line at 12 USD. A rebound from this level would push the INTC price up to 26 USD. This scenario is the most likely, given the company’s weak Q1 2025 results and cautious Q2 2025 outlook, which includes the possibility of an increased loss per share of up to 0.32 USD.

The optimistic forecast for Intel stock projects growth from the current level, with a break above the resistance at 26 USD. In this case, INTC could rise to the trendline at 40 USD.

Risks of investing in Intel Corp. stock

When investing in Intel Corp. stock, it is necessary to consider factors that could negatively affect the company’s future revenue. The key factors are outlined below:

• Manufacturing challenges: Intel faces challenges in manufacturing its products, particularly as it transitions to more advanced microtechnologies. Delays in adopting new practices and overspending on manufacturing projects may lead to higher costs without a corresponding increase in revenue
• Contract business challenges: Intel’s ambition to become the second-largest contract chipmaker by 2030 faces challenges in attracting clients, intense competition from Samsung and TSMC, and risks associated with this partnership model, which requires significant investments with no guarantee of a return
• Loss of market share and competition: Intel’s traditional dominance in the PC market is diminishing due to reduced demand for these devices. Competition from ARM processors, particularly in mobile devices, servers, and data centres, threatens Intel’s income
• AI and data centre market: Intel is notably lagging in the AI chip industry, where NVIDIA and AMD hold a significant competitive edge. This has resulted in a loss of market share, particularly in the data centre segment, which is crucial for generating high-margin revenue
• Financial standing and investments: Intel reported negative EPS again, indicating financial difficulties. This situation could undermine investor confidence and affect the outlook for funding research and development necessary for further growth
• Suspended dividend payouts: the suspension of dividends, which had been in place since 1992, may discourage investors focused on stable income. Such financial restrictions could erode investor confidence and ultimately push the stock lower
• Geopolitical and economic factors: tensions between the US and China, a key semiconductor market, could negatively impact Intel’s business in this area. Additionally, the company’s global manufacturing presence is subject to serious geopolitical risks for several reasons

These factors collectively threaten Intel’s future earnings, potentially leading to a decline in revenue and higher unplanned expenses.