- Intel stock plunges over 5% in after-hours trading after a weaker-than-expected Q2 forecast disappoints investors.
- First-quarter revenue beat estimates at $12.67 billion, buoyed by strong performance from Intel’s foundry division.
- CEO Lip-Bu Tan signals deep workforce cuts and internal restructuring to regain market share and long-term stability.
Intel stock plunges after the chip giant issued a disappointing outlook for Q2 2025, rattling investor confidence despite a better-than-expected performance in the first quarter. Shares dropped more than 5% in after-hours trading on Thursday, wiping out some of the 4.4% gains seen earlier in the day.
The tech heavyweight projected revenue between $11.2 billion and $12.4 billion for Q2—well below analysts’ expectations compiled by Visible Alpha. Additionally, the company anticipates adjusted earnings per share to break even, another miss relative to Wall Street forecasts.
According to CFO David Zinsner, “The current macro environment is creating elevated uncertainty across the industry, which is reflected in our outlook.” That uncertainty proved costly, as Intel stock plunges amid fears of broader weakness in the semiconductor space.
Intel Stock Plunges Despite Solid Q1
While the Q2 guidance was a letdown, Intel’s first-quarter performance showed signs of stability. The company posted $12.67 billion in revenue—down less than 1% year-over-year but still ahead of estimates. Adjusted net income came in at $580 million or $0.13 per share, topping expectations despite declining from $759 million or $0.18 per share a year earlier.
Notably, Intel’s foundry division, which produces chips for third-party clients, reported $4.7 billion in revenue—exceeding projections and offering a bright spot in the company’s financials.
Zinsner also noted during the earnings call that Q1 results may have received a short-term lift due to customer behavior influenced by possible upcoming tariffs. “We believe Q1 revenue benefited from customer purchasing behavior in anticipation of potential tariffs,” he said, though he admitted the scale of the impact is difficult to quantify.
Even so, Intel stock plunges due to forward-looking concerns, not past performance.
CEO Tan Warns of Tough Choices as Intel Stock Plunges
Newly appointed CEO Lip-Bu Tan didn’t sugarcoat the challenges ahead. “The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth,” he said.
In a letter accompanying the earnings report, Tan outlined a series of aggressive changes, including a stricter return-to-office policy, fewer internal meetings, and major organizational streamlining.
“There is no way around the fact that these critical changes will reduce the size of our workforce,” Tan wrote. “As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future.”
That letter came just days after reports surfaced that Intel may slash more than 20% of its workforce in a drastic effort to cut costs and improve execution. As Intel stock plunges, the company appears poised to make bold moves to steer the ship back toward profitability.
Outlook Remains Cloudy as Intel Stock Plunges
With macroeconomic uncertainties and internal restructuring both in play, Intel’s road to recovery is fraught with challenges. While the company outperformed in Q1, its soft Q2 guidance suggests turbulence ahead.
Even though Intel’s stock had climbed about 7% year-to-date through Thursday’s close, the latest earnings call and forward-looking statements were enough to shake investor optimism. The fact that Intel stock plunges despite solid earnings highlights the market’s sensitivity to outlook and strategic direction.
Going forward, all eyes will be on how effectively CEO Tan and his team can execute their turnaround plan in what remains a competitive and volatile semiconductor landscape.
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