Investors rewarded Intel (NASDAQ:INTC | INTC Price Prediction) prematurely heading into earnings on January 22, but it ended up being a disappointment. Revenue and EPS both beat consensus, but it wasn’t enough to lift the mood.
Revenue came in at $13.67 billion vs. the $13.39 consensus. Non-GAAP EPS came in at $0.15 vs. the $0.08 consensus. What disappointed the market was the Q1 guidance, with Intel expecting $11.7-12.7 billion. The midpoint of $12.2 billion came in below $12.53 billion expected.
INTC stock ended up diving right back down after earnings and guidance came in. It simply undid its gains and is back at $48 post-market, though it could climb back above.
Let’s take a look at whether or not INTC stock is worth buying right now and if it can surge above $100 despite the soft guidance disappointing the market.
The positives do outweigh the negatives
Revenue declined 4% year-over-year, and GAAP EPS was -$0.12, with the Q1 2026 GAAP EPS expected to worsen to -$0.21, with flat non-GAAP EPS. However, these are rather in line with expectations, if not better. This is because Intel has been given a lifeline by the U.S. government, SoftBank, and Nvidia (NASDAQ:NVDA).
But to fully make use of this lifeline, Intel needs to build out the infrastructure. The revenue decline is not a big deal if Intel can scale later, and the losses show that Intel is making progress on building out what is needed to drive sales later.
The higher-than-expected sales figure shows that demand is there. It was confirmed by CEO Lip-Bu Tan, who said, “We’re working aggressively to grow supply to meet strong customer demand”. Others in management have also made clear that the demand is there, but Intel’s capacity isn’t.
I do not think the guidance is all too bad, either. The midpoint does fall below expectations, but the upper end of $12.7 billion shows that the business can still outperform expectations.
Guidance for Q4 in the previous quarter was “$12.8-13.8 billion,” with Intel’s actual Q4 report showing $13.67 billion. If the Q1 guidance materializes similarly, sales will be reported above the old $12.53 billion consensus.
The lower guidance now will likely lower expectations to $12.2 billion.
Wall Street will warm back up to Intel
The issue is no longer Intel not having demand, but a lack of capacity that is being built out quickly. Intel has one of the best CEOs in the industry, who has managed to convince Trump and the rest of the industry to invest in Intel’s resurgence. It was only in 2024 that the previous CEO was calling for “prayer and fasting” for Intel.
In 2026, the business looks miles better. It has the capital and the demand to make a comeback. You’ll see losses in the quarters ahead as this happens, but Intel can outperform later on. CFO David Zinsner said that the ongoing server CPU shortage will leave Intel’s available supply at its lowest point this quarter before improving later in 2026.
Nvidia invested $5 billion in Intel last year. I expect another big investment as needed. Nvidia needs a second domestic source for production to reduce reliance on TSMC (NYSE:TSM). The 10% government stake in Intel is now worth $25.9 billion, so that’s something that is likely to be reinforced as needed, too.
Intel has time to live up to the hype – I’ll buy INTC stock
INTC stock is below $50 again, and it’s a good entry point by all means. Intel hasn’t disappointed, and its best days lie ahead once capacity comes online and the company starts meeting demand.
Xeon orders are so strong that Intel is moving wafers from client to datacenter. That is the opposite of an empty fab problem.
At the current price, you’re buying after the first proof-of-life quarter. I expect once Intel manages to prove to Wall Street that it can start grabbing foundry market share, $100 will be within reach this year.
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