Intel Corporation (INTC) shares suffered a dramatic sell-off, plunging 17% to close at $45.07 on Friday, January 26, 2026. This marked the stock's worst single-day decline since August 2024, triggered by a disappointing first-quarter outlook and warnings of persistent supply constraints for its AI server chips.
The semiconductor giant projected Q1 2026 revenue in the range of $11.7 billion to $12.7 billion, missing the Wall Street consensus estimate of $12.51 billion. The company also guided for break-even non-GAAP earnings per share, below analyst expectations of $0.05. While demand from cloud and AI infrastructure customers remains robust, Intel's management conceded it underestimated the acceleration of orders, leaving its factories stretched and unable to fully capitalize on the market opportunity.
Supply bottlenecks, particularly around advanced manufacturing process yields, are capping output and pressuring margins. Executives indicated supply would be tightest in Q1, with only gradual improvement expected later in the year. This admission disrupted the recent turnaround narrative that had propelled Intel's stock, which had gained 84% in 2024 and was up more than 22% in January prior to the crash.
Analyst reaction was mixed. Morgan Stanley raised its price target to $41 from $38 but maintained an Equal Weight rating, citing "meaningful supply constraints" as a key concern, especially for Intel's foundry business ambitions. Other firms like Truist and RBC Capital Markets also adjusted targets, reflecting caution over the near-term outlook. A poll on Stocktwits showed 60% of retail traders viewed the selloff as a buying opportunity.
