INTC 4Q25: Q1 Marks the Supply Trough, with Margins and Revenue Expected to Recover by Q2

Intel delivered a solid Q4 2025, beating guidance across revenue, gross margin, and EPS. However, the company faces a challenging start to 2026. The central theme of the call was acute supply constraints, driven by a stronger-than-expected surge in AI-related unit demand. Consequently, Q1 2026 guidance is below seasonal norms with gross margins dipping. Management emphasized a strategy of discipline, prioritizing Data Center wafers over Client, and focusing on execution to restore margins and supply by Q2 2026.

Under Lip-Bu Tan’s leadership, the pivot toward reduced bureaucracy and an engineering-first culture is expected to drive sustained execution improvements. When combined with the robust secular tailwinds from AI demand, the long-term investment thesis remains constructive despite near-term supply friction.

Financial Summary

Q4 2025 Results (Beat)

• Revenue: $13.7 billion, hitting the high end of guidance.

• Gross Margin: 37.9%, exceeding guidance by 140 basis points due to higher revenue and lower inventory reserves.

• EPS: $0.15, beating the $0.08 guidance.

• Cash Position: Exited 2025 with $37.4 billion in cash and short-term investments.