Intel’s stock fell sharply, even though the company reported better-than-expected earnings for the first quarter. Intel posted revenue of $12.67 billion and adjusted earnings per share (EPS) of $0.13, beating analysts’ expectations of $0.01 EPS and revenue of $12.3 billion. However, its forecast for the second quarter disappointed investors, causing a significant drop in the stock price.
For the second quarter, Intel expects revenue to be between $11.2 billion and $12.4 billion, which is less than the market estimate of $12.8 billion. The company anticipates breaking even on an adjusted basis, whereas analysts expected earnings of about 7 cents per share. This lower guidance highlights the ongoing issues Intel faces in the semiconductor market, such as rising competition and economic uncertainties.
Intel’s new CEO, Lip-Bu Tan, stressed the importance of improving efficiency and cutting costs for long-term growth. The company plans to lower both operating and capital spending, aiming for a revised capital budget of $18 billion for 2025, down from $20 billion. This plan includes layoffs and a focus on core business areas to boost profits.
The disappointing outlook for the second quarter overshadowed Intel’s strong first quarter, leading to a more than 5% drop in the stock during after-hours trading. Intel continues to struggle to regain market share in the AI and semiconductor sectors, and concerns over tariffs and economic slowdowns add to investor worries about the company’s future.
As Intel faces these challenges, it focuses on improving its AI strategy and managing its finances carefully. Despite recent setbacks, investors hope Tan’s leadership will help Intel become more competitive in the fast-changing tech industry.