Intel's Next Chapter: What Investors Must Monitor in 2026

Intel faced a sharp stock pullback following its January earnings announcement, yet the semiconductor giant delivered mixed signals that left the investment community parsing the details. While the company beat expectations on Q4 revenue and earnings, the disappointing guidance for the upcoming quarter raised questions about what investors should expect in the months ahead.

The company reported non-GAAP adjusted earnings of $0.15 per share on revenue of $13.7 billion—both exceeding analyst estimates of $0.08 per share and $13.4 billion respectively. However, the forward-looking commentary proved problematic. Management guided for Q1 sales between $11.7 billion and $12.7 billion, with the midpoint landing below Wall Street’s average estimate of $12.51 billion. More concerning, the company projected break-even earnings when the market had priced in adjusted earnings per share of $0.05. Despite the recent selloff, Intel remains up 111% over the past twelve months, suggesting the broader narrative hasn’t shifted entirely negative—yet.

The AI Victory vs. Foundry Headwinds: A Tale of Two Businesses

Intel’s data center and artificial intelligence segment demonstrated genuine strength, growing 8.9% year-over-year to generate $4.7 billion in Q4 revenue. This comfortably exceeded the $4.43 billion analyst consensus, and management noted that supply constraints actually held back what could have been an even stronger quarter. The company is actively reshaping its fab operations to accommodate production of its new server chips, a transition that explains part of the conservative Q1 outlook.

On the manufacturing front, Intel has commenced shipping processors built on its 18A process node and maintains that development work on the next-generation 14A process remains on schedule. For investors tracking the company’s long-term trajectory, these milestones carry significance—they represent Intel’s pathway to competing more effectively in advanced chip fabrication.

The troubling element remains the foundry business, which continues hemorrhaging cash. Last year, the segment posted a $10.3 billion operating loss, and third-party customer adoption remains sluggish. External customer revenue reached just $222 million in the most recent quarter. While management forecasts double-digit sequential growth in foundry revenue for Q1, the market clearly received this projection with skepticism. The selloff intensified because foundry expansion still appears to offer limited near-term revenue uplift relative to the operational losses being absorbed.

Margin Compression and Manufacturing Efficiency: The Critical Next Question

Intel’s gross margin contracted meaningfully from 37.9% in Q4 to a projected 34.5% in the current quarter—a concerning 350 basis point decline. Industry observers are asking whether this compression stems partly from the product mix implications of the 18A process. If so, this could suggest that manufacturing yields on the 18A node face efficiency headwinds, potentially limiting the platform’s profitability and dampening third-party customer demand.

For investors evaluating Intel’s recovery prospects, the next earnings report and accompanying guidance will prove instrumental. Forward sales guidance and gross margin targets should clarify whether the 18A process can meaningfully support a business turnaround, or whether the company must depend primarily on the subsequent 14A architecture to restore confidence. The margin trajectory and foundry unit economics will become the focal points that determine whether skepticism proves justified or premature.

The Investment Outlook: What Informed Investors Are Tracking

The recent decline and mixed guidance have prompted many investors to reassess their Intel position. The company finds itself at an inflection point where execution on manufacturing milestones and margin recovery will determine whether the stock recaptures momentum. Intel stock has experienced both enthusiasm (the 111% year-to-date gain) and skepticism (the recent pullback)—a reflection of how pivotal the next several quarters have become.

For investors considering whether now represents an entry point or a warning sign, the calculus centers on whether Intel can demonstrate that its advanced process nodes will drive the margin expansion and customer adoption required to offset continued foundry losses. The upcoming quarterly result and forward guidance will provide crucial data points for this assessment. Until then, expect continued volatility as the market waits for proof that Intel’s strategic manufacturing investments will pay dividends rather than deepen losses.