Intel Stock: Dark Forecast Plunges Shares Despite Strong Q1

Intel's stock took a significant hit in after-hours trading despite beating first-quarter expectations with revenue of $12.7 billion and earnings of 13 cents per share. The chip giant shocked investors with its surprisingly gloomy outlook for the second quarter, projecting revenue between $11.2-12.4 billion - well below analyst expectations of nearly $13 billion - and suggesting earnings could approach zero. This dramatic downturn stems partly from customers front-loading purchases in Q1 due to trade conflict concerns, essentially borrowing from future demand. Additionally, Intel faces mounting pressure from the potential implementation of Chinese tariffs on US-manufactured chips and increasing signs of broader economic cooling that complicate forecasting efforts.

Cost-Cutting While Fighting for AI Relevance

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Sollten Anleger sofort verkaufen? Oder lohnt sich doch der Einstieg bei Intel?

Under new CEO Lip-Bu Tan, Intel is implementing aggressive cost-reduction measures, including expense cuts, factory construction delays, and upcoming staff reductions aimed at streamlining bureaucracy. The company faces additional challenges in the crucial AI chip market, where Nvidia maintains dominance. Intel's strategy has shifted toward developing comprehensive AI platforms rather than relying on acquisitions, though financial constraints have forced prioritization of balance sheet strengthening over immediate expansions. Meanwhile, the company contends with a troubling trend of customers preferring older, less profitable processor generations for both PCs and data centers, undermining margins and hampering adoption of newer, higher-margin products.