Since the appointment of CEO Lip-Bu Tan, Intel has had the wind in its sails again. Investments from large companies and the US government, strong quarterly figures, and a restoration of confidence in its chip production contributed to positive sentiment. Now that Intel has set its expectations lower than expected for Q1 2026, doubts have made a comeback. Is that justified?
Intel actually beat Wall Street’s expectations. Revenue was $13.7 billion this quarter, compared to an expected $13.4 billion. But the estimate that revenue for the coming quarter would be between $11.7 and $12.7 billion was on the low side of the $12.51 billion that analysts had predicted.
There was also more money lost at the bottom line than in the same quarter last year. Q4 2025 resulted in a net loss of $600 million, significantly more than the $100 million in Q4 2024. And although chip production yields are entirely on schedule, efficiency in this area is not yet where Tan would like it to be.
Painful transition
It has been known for some time that Intel’s turnaround was, is, and will continue to be painful. Under Tan’s predecessor, Pat Gelsinger, Intel decided to invest heavily in production capacity, partly by setting up Intel Foundry as a separate business unit. The investments in new chip facilities amount to billions and are still largely not paying off, as many expansions and new locations will only go live in the coming years. Lip-Bu Tan quickly intervened in this process after taking office and scaled back the investments.
Now Intel faces another challenge. Although it is back on its feet, it has to navigate a PC market in which memory prices have skyrocketed. This is reducing margins for companies such as Dell, HP, and Lenovo, but Intel is also suffering from the expected flattening or decline in sales figures due to higher prices.
Intel itself says it is trying to switch to data center sales as much as possible, where it is engaged in fierce competition with AMD. Although Intel has the market share advantage in both client systems and data centers, AMD has gained ground in recent years.
From receiver to provider
If the AI hype never turns out to be a bubble, Intel could benefit from its increasing production capacity and competitiveness in chip manufacturing. Whereas TSMC previously seemed to have a virtual monopoly on the latest chip processes, Intel is now able to offer a reasonable alternative. Even Apple, which once abandoned Intel and became TSMC’s most prominent customer for new manufacturing processes, is considering returning to Intel Foundry.
Read also: Apple reunion beckons for Intel, which is already being rewarded on the stock market