Shares of Intel plunged 14% on Friday after the chipmaker warned it could not meet surging, AI-driven demand for data-center processors due to supply constraints, denting investor confidence in its turnaround. Intel said factories are running at capacity, yet shortages have limited shipments of server chips used alongside advanced GPUs in data centers.
The selloff followed weaker-than-expected revenue and profit forecasts, potentially wiping more than $35 billion from Intel’s market value. Analysts said the recent rally had been driven by optimism rather than near-term fundamentals, with the company misjudging the speed of the server cycle. Intel’s finance chief said supply should improve in the second quarter, with some brokerages expecting constraints to bottom out by March.
Adding pressure is a global memory shortage that could dampen PC demand—Intel’s largest segment—just as it rolls out its Panther Lake chips to regain share lost to AMD. CEO Lip-Bu Tan has focused on cost cuts and narrowing contract manufacturing ambitions, but investors are watching closely for concrete customer wins tied to Intel’s upcoming 14A process.
