Bank of America resets Intel stock forecast

Intel reported its Q4 net connected January 22. The guidance provided by the institution for Q1 disappointed investors, and the banal took a tumble connected the pursuing day, closing astatine $45.07, oregon 17.03% lower, according to Yahoo Finance.

During the net call, Lip-Bu Tan, CEO of Intel, addressed the important contented of yields for Intel’s 18A manufacturing process (node).

“My squad and I are moving tirelessly to thrust ratio and much output from our fabs. While yields are successful enactment with our interior plans, they are inactive beneath what I privation them to be. Accelerating output betterment volition beryllium an important lever successful 2026 arsenic we look to amended enactment our customers.”

The information that Intel did not springiness an nonstop percent for the yields during the study calls that accusation into question. This is adjacent aft KeyBanc expert John Vinh wrote that Intel’s foundry reached output rates of much than 60%, according to Wall St Engine’s station connected X, formerly Twitter.

While 60% yields wouldn’t beryllium great, they wouldn't beryllium successful the “we’d alternatively not say” territory either, which leads maine to deliberation they are inactive beneath 60%.

• Revenue of $13.7 billion, a 4% year-over-year decrease

• Gross borderline of 36.1% compared to 39.2% successful Q4 2024

• Net nonaccomplishment attributable to Intel $0.6 billion compared to a nonaccomplishment of $0.1 billion
  in Q4 2024

• Diluted nonaccomplishment per stock attributable to Intel $0.12 compared to the nonaccomplishment per share
  of $0.03 successful Q4 2024

• Revenue successful the scope of $11.7 cardinal to $12.7 billion

• Gross borderline 32.3%

• Diluted nonaccomplishment per stock attributable to Intel $0.21

I wrote astir Intel banal being overvalued and however the results of Q4 volition beryllium comparatively disappointing successful my nonfiction “Analysts reset Intel banal terms people up of earnings.”

I besides noted that issues with getting bully yields connected the 18A node volition apt bespeak poorly connected Panther Lake’s nett margins.

Intel CFO David Zinsner confirmed this. “When you look astatine Q1, the gross borderline diminution successful Q1, there’s 2 main components," helium said during the net call.

"Obviously, gross coming down with a mostly fixed outgo concern is going to impact gross margins. But the different portion of this is Panther Lake; portion the outgo operation improves from Q4 to Q1, it’s inactive diluted to the firm average, and it’s a bigger percent of the mix.”

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