Intel’s Troubles: A Peculiar Sort of Progress

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Now, it’s a curious thing, this business of Intel [INTC 17.15%]. For a spell there, they were the biggest dog in the chip yard, a veritable titan of transistors. Then, all of a sudden, like a frog jumping into a cold pond, they caught fire—the stock price, that is. Jumped near 150% in five months, it did, fueled by government coin and a new fella, Lip-Bu Tan, tryin’ to steer the ship. A right lively spectacle, I assure you.

But hold your horses. Friday came along, and with it, a bit of a damper. The company offered up a forecast for the next quarter that was, shall we say, less than rosy. Revenue and profits lookin’ to take a tumble, and the stock, naturally, followed suit, fallin’ faster than a politician’s promise. It’s always the way, ain’t it?

The bulls, bless their optimistic hearts, see Intel as a long-term wager on an American institution. And they ain’t entirely wrong. There’s no other company in this country so central to the whole shebang of semiconductors. They design the chips, they build the chips, they’ve got a finger in every pie. Mostly known for those PC brains, mind you, but dabblin’ in all sorts of clever contraptions.

But here’s the rub. Intel got itself tangled in a mess of strategic missteps and plain old execution failures. And a fella can’t just wave a magic wand and fix that overnight. They claim the supply troubles will ease, but there’s a whiff of the same old errors lingerin’ about, especially in that supply chain of theirs. Seems some folks just can’t help but stumble over their own feet.

What Ails Intel Now

One of the biggest headaches for Intel these past few years has been that foundry division. Burnin’ through billions in losses, it is. They reckon those factories could be a real advantage, and investors are hopin’ they’ll be worth a dime when this new 18A process comes along. But from what they said on the latest earnings call, it seems they’re still wrestlin’ with gettin’ that foundry biz off the ground.

Mr. Tan spoke of disappointing yields—that’s the percentage of usable chips from a wafer, you see—and said improvin’ ’em is the main goal for 2026. A long time to wait, if you ask me. The CFO, David Zinsner, admitted they underestimated the demand for data center chips—a bit like tryin’ to predict the weather—and they’re workin’ to untangle their own supply chain messes.

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Now, these problems seem solvable, mind you. But after that six-month surge in the stock, shares are priced like they’ve already conquered ’em and are sailin’ smooth. A bit premature, wouldn’t you say?

Even after the sell-off, Intel’s worth over $200 billion, even though its revenue ain’t budgin’ much and it’s losin’ money by the generally accepted accounting rules—all while the chip industry is enjoyin’ the biggest boom it’s ever seen. It’s a peculiar sort of progress, I tell you.

There’s still some upside potential, to be sure. But this sell-off is justified. Management has got a heap of work to do to fix these execution issues and win back the trust of investors. It’s a long road, but a fella can always hope, can’t he?

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2026-01-24 01:32