Intel Shares Plunge 17% on Weak Guidance
The Spin
Narrative A
Intel's massive stock run-up to 88 times forward earnings was completely unjustified for a struggling company with 35% gross margins trying to catch up to TSMC, which trades at under 20 times earnings. The foundry customer announcements won't come until late this year at the earliest, exposing Wall Street rumors as pure speculation that artificially inflated the stock price over 130% in six months.
Narrative B
Intel beat earnings expectations and is strategically focusing production capacity on high-margin Xeon processors to capitalize on the booming data center market, a smart move that positions the company for long-term success. Supply constraints are temporary and will improve starting in the second quarter, making current weakness a short-term issue rather than a fundamental problem with Intel's multiyear turnaround plan.