Intel stock suffers as CEO Lip-Bu Tan calls for "time and resolve"
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Intel CEO Lip-Bu Tan. Photo: Annabelle Chih/Bloomberg via Getty Images
Intel shares plunged Friday as investors grew frustrated with the company's turnaround timeline.
Why it matters: The tech giant is trying to get back on its feet after falling behind in the AI chips race.
Driving the news: Intel CEO Lip-Bu Tan — who has been navigating myriad political, tech and financial challenges since taking the job in March — told investors late Thursday that his turnaround plan will take "time and resolve."
- "We are on the multiyear journey," he said on an earnings call. "But my team and I are committed to rebuilding this iconic American company and increasing the long-term value for our shareholders.
Between the lines: Intel is paying the price for a strategic misstep.
- Despite manufacturing its own chips in company-owned factories, Intel has struggled to line up enough supply to meet demand for processors used in AI data centers.
- "We directionally weren't managing the supply to an expectation that there would be a unit increase that significantly," CFO David Zinsner said on the call, responding to an analyst's question on its inventory situation.
The impact: The stock closed down 17% Friday.
Friction point: Analysts, meanwhile, pointed to Intel's struggles in meeting its own inventory needs as a reason to doubt its ambitions of manufacturing chips for outside customers.
- The stock has gotten "well ahead of Intel's (INTC) capability to deliver a competitive/profitable business model," Bank of America analyst Vivek Arya wrote Friday in a research note.
- "We appreciate the scarcity value of leading-edge manufacturing, but if INTC cannot deliver the right manufacturing yield for its own products," Arya said, then "it may not be able to promise flawless execution to external customers" for more advanced chips, "where INTC has no scale or history of execution."
The other side: Tan said the company is fielding positive signals from its customer base.
- "I'm hearing a clear, consistent message. They see the progress we are making," the CEO said. "They want Intel at the table as they navigate their own transformations."
The intrigue: The world's richest economy and the world's most valuable company became Intel investors in 2025 — the Trump administration secured a U.S. government stake in Intel, while Nvidia backed the company as well.
- Those investments drove share gains for Intel after a period of decline.
Yes, but: In the long run, investors will want to see meaningful growth in revenue and earnings.
- And "we don't see how external foundry could generate meaningful EPS accretion," Arya wrote.
The bottom line: Even if AI enthusiasm proves overblown, Intel hasn't yet been able to ride the wave.
