Intel Beats Q4 Estimates, Guides Lower But Nova Lake Desktop CPUs Arrive In 2026
Intel's fourth quarter earnings are in and they reflect a 4.1% year-over-year loss to $13.7 billion (same as the previous quarter), bringing the full-year tally to a flat $52.9 billion. According to Intel CEO Lip-Bu Tan, the company "delivered a solid finish to the year" despite the loss, which along with downward guidance for the current quarter has drive the company's share price down as much as 13% in premarket trading.
Investors are feeling skittish, if the share slide is any indication. Intel anticipates the first quarter of 2026 to generate between $11.7 billion to $12.7 billion in revenue, down roughly $500 billion year-over-year. As for the last quarter, even though revenue was down, Intel still managed to beat expectations with the $13.7 billion figure coming in roughly $400 million higher than the company's outlook in October.
"Our conviction in the essential role of CPUs in the AI era continues to grow," Tan said in a statement. "We delivered a solid finish to the year and made progress on our journey to build a new Intel. The introduction of our first products on Intel 18A – the most advanced process technology developed and manufactured in the United States – marks an important milestone, and we’re working aggressively to grow supply to meet strong customer demand."
Tan also doubled down on Intel's priorities, which are to "sharpen execution, reinvigorate engineering excellence, and fully capitalize on the vast opportunity AI presents across all of our businesses."
Intel's Client Computing Group (CCG) remains its top earner with $8.2 billion in revenue last quarter, which is down 7% year-over-year, followed by its Data Center an AI (DCAI) division, which posted a 9% YoY gain to $4.7 billion. Intel Foundry was also up to the tune of 4% at $4.5 billion. All other businesses posted $600 million in revenue for a sharp 48% decline.
One of the challenges Intel faces is a challenging environment due to supply shortages. This is presumably the reason why Intel is guiding down this quarter.
"We exceeded Q4 expectations across revenue, gross margin, and EPS even as we navigated industry-wide supply shortages," said David Zinsner, Intel CFO. "We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond. Demand fundamentals across our core markets remain healthy as the rapid adoption of AI reinforces the importance of the x86 ecosystem as the world’s most widely deployed high-performance compute architecture."
The good news for Intel, however, is that it has some promising product launches. It already unleashed Panther Lake at the Consumer Electronics Show earlier this month, and during an earnings call, Tan confirmed that Intel's next-generation Nova Lake chips will arrive this year.
"Along with our next-generation Nova Lake coming at the end of 2026, we now have a client road map that combines best-in-class performance with cost-optimized solutions giving me confidence that we are on the path to fortify market share and profitability in both notebooks and desktops over the next several years," Tan said.
Reading between the lines, Tan is assuring consumers that it isn't abandoning them in favor of data center customers. Consumers are understandably frustrated by higher-priced components, particularly DRAM and storage, because of massive data center demand driven by AI and the rush by chip makers to keep the AI beast fed.
From Intel's perspective, however, there's a synergy between the two market segments that can fuel one another. During the same earnings call, Tan said the PC has become an important part of the AI infrastructure.
"The surge in AI workloads is driving massive demand for data centers, but cloud capacity alone cannot meet the scale of inference needed especially in the power constrained environment. This accelerating the push toward hybrid AI, splitting workloads between cloud and client which offers clear advantages in performance, cost and control," Tan said.
Still, Intel can't escape the reality that the client landscape is being strained by chip shortages and upward adjusted pricing that it can't directly control. Zisner touched on this during the earnings call, saying that "client CPU inventory is lean" and that DRAM, NAND, and substrates are under increased pressure from the intense demand to support the rapid AI infrastructure expansion.
"Rising component pricing is a dynamic we continue to watch closely, especially relative to the client market and could limit our revenue opportunity this year," Zisner said.
In short, while Intel's latest quarterly earnings showed a year-over-year decline, the company remains confident that it's on the right track.
