Intel Shares Plunge Amid Supply Chain Strains
Intel’s shares fell 14% on Friday after the company struggled to meet strong AI-driven demand for data-center chips. Investors had hoped for a smoother turnaround.
After years of missing out on the AI boom that boosted Nvidia, Intel is finally seeing high demand for its server chips, which work alongside advanced graphics processors in data centers.
AI Demand Meets Capacity Limits
High-profile investments from the U.S. government, SoftBank, and Nvidia had fueled optimism. Intel’s stock gained 84% last year and jumped 47% in January 2026 alone.
However, TD Cowen analysts noted that the rally was driven more by “the dream” than by immediate fundamentals. Intel is running factories at full capacity and still cannot meet demand. CFO David Zinsner expects supply to improve in the second quarter after hitting a first-quarter low.
Analysts Expect Relief Soon
Jefferies analysts predict Intel’s supply shortage will bottom out in March, while Oppenheimer expects constraints to ease by the second quarter.
Friday’s stock drop followed profit and revenue forecasts below Wall Street estimates. If losses hold, Intel could lose more than $35 billion in market value.
Bernstein analysts said, “The server cycle seems real, but the company misjudged it, with its capacity caught massively off guard.”
Production Challenges and Memory Shortages
Intel faces delays in changing its semiconductor production to meet demand for data-center processors. Global memory shortages also threaten PC chip sales, where Intel hopes its new Panther Lake chips can recover market share lost to AMD.
