American chipmaker Intel’s shares plummeted by more than 17% in a single session, marking the firm’s worst showing since 2024 as it buckles under a deepening supply crunch that’s left the company unable to keep pace with demand for its products.

As of early trading this morning (January 26), Intel’s price fell to $44.39, a total decline of more than 18% since closing at $54.32 on Thursday, January 22, following a lacklustre Q4 2025 earnings announcement, a hard correction from the 40% gains the company enjoyed over the past month.

Despite a series of strategic deals inked with the likes of the US Government, Softbank and even rival NVIDIA that brought in billions in fresh equity investment over 2025, Intel ended the fourth-quarter with revenues of $13.7 billion, down 4% YoY – a net loss of $600 million.

Speaking at the earning call following the results, Intel’s CEO Lip-Bu Tan admitted that the firm would not be able to meet market expectations for server chips due to severe supply chain constraints across the sector, with Tan saying that the industry is “facing a very big challenge”.  

Meanwhile, CFO David Zinsner acknowledged that the company misjudged the scale of demand over the third and fourth quarters, adding that conversations “just before this call” indicated the spike was likely the start of a multi‑year demand cycle.

In an effort to stabilise the only part of the businesses to exceed expectations, Zisner said that Intel will shift any capacity in its internal wafer supply to its Data Center and AI Group (DCAI), which delivered yearly revenue of $16.9 billion, up 5% YoY.

While Tan said the firm will focus on building up its foundry business to improve production yields, this will “take time…considerable effort and resources”, squeezing the company’s short-term supply for its upcoming Panther Lake chips, not to mention its next-gen processor, Nova Lake, due for the end of the year.

“It’s just literally hand to mouth what we can get out of the fab and what we can get the customers, is how we’re managing it,” Zinsner told analysts following the call.

“Obviously, we’re shifting as much as we can over to data centre to meet the high demand, but we can’t completely vacate the client market.

“So we’re trying to support both as best we can and obviously work our way out of this supply issue. I do believe that the first quarter is the trough. We will improve supply in the second quarter.”

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Intel said it expects Q1 2026 revenue of between $11.7 billion and $12.7 billion, with adjusted earnings ​per share predicted to break even, with CEO Tan saying he is still convinced of the “essential role of CPUs in the AI era”.

“Our priorities are clear: sharpen execution, reinvigorate engineering excellence, and fully capitalise on the vast opportunity AI presents across all of our businesses,” he said.

Intel’s issues may be the first sign of deeper trouble ahead, however, with early indicators from other chipmakers showing a severe supply crisis on the way.

According to reports from Reuters, South Korea’s SK Hynix has sold out of its chips for 2026, Samsung has already filled its order books for the whole year, while Micron CEO Sanjay Mehrotra warned that the market pressure is likely to extend far past 2026.