Intel Stock Plummeting Today: The Motley Fool

Intel's Q4 report beat expectations, but weak forward guidance caused a stock sell-off. AI opportunities may not be as promising as hoped.

Intel's fourth-quarter report was released after the market closed yesterday, and it exceeded market expectations in terms of sales and earnings. The company posted non-GAAP earnings per share of $0.54 on revenue of $15.4 billion, showing a 10% increase in sales and a 260% increase in earnings compared to the previous year. This performance was significantly higher than the average analyst estimate.

However, despite the positive results, Intel issued forward guidance for the first quarter that fell short of market expectations, leading to a negative reaction from investors. The company is forecasting adjusted per-share earnings of $0.13 on revenue between $12.2 billion and $13.2 billion, which is lower than what analysts had predicted.

This substantial drop in projected Q1 performance has raised concerns among investors, especially considering the significant gains Intel has made over the past year. The company's forward price-to-earnings multiple has been pushed up to roughly 23, reflecting the market's high expectations for its future performance.

While Intel has seen success in improving business performance, receiving government support for its foundry business, and generating excitement about opportunities in artificial intelligence, its guidance suggests that it is not yet experiencing significant business tailwinds from AI. The company's first-quarter sales are expected to increase by just 4% compared to the previous year, indicating that its AI strategy has not yet had a substantial impact on its business.

Overall, while Intel has shown strong performance in the past, its future outlook has raised concerns among investors. The company's failure to meet market expectations for the first quarter has led to a negative reaction in the stock market, highlighting the importance of managing expectations in the face of changing business dynamics.