Intel Shares Drop Nearly 6% on Weak Outlook and Job Cuts
Intel Shares Drop: What’s Behind the Slide?
Intel shares fell nearly 6% in early trading on Friday, July 25, 2025, after the company issued a disappointing outlook for the third quarter and announced job cuts as part of cost-saving measures. This decline raised concerns about the chipmaker’s future performance, particularly in the data center and PC segments, which remain under intense competitive and economic pressure.
The stock dip followed the company’s earnings report released Wednesday evening, which showed a flat revenue projection and slower-than-expected demand recovery in some of its key markets.
What Did Intel Report?
Intel forecasted third-quarter revenue between $12.6 billion and $13.6 billion, below Wall Street’s average estimate, according to LSEG data. The chipmaker’s adjusted earnings per share, below investor expectations of a modest profit, which disappointed investors who were expecting signs of stronger momentum.
Intel reported a net loss of $2.9 billion in Q2, mostly due to restructuring costs like layoffs and facility reductions.
The company’s second-quarter revenue, however, stood at $12.9 billion, slightly above expectations, showing modest signs of stabilization. But this wasn’t enough to soothe market anxiety.
“Intel is still struggling to get back into shape amid competitive threats and weak enterprise demand,” said analyst Laura Fisher on X
Why Is Intel Cutting Jobs Again?
As part of a cost-reduction strategy, Intel confirmed plans to cut jobs in several departments, particularly in its client computing and data center divisions. This move follows a similar round of layoffs in 2023 and signals ongoing restructuring efforts under CEO Lip‑Bu Tan.
Intel is aiming to trim expenses by up to $10 billion annually by 2027, according to its earlier public statements. Intel plans to lay off around 24,000 employees globally, approximately 22% of its workforce, with some affected employees notified this week.
The company aims to reduce its employee headcount from nearly 100,000 to about 75,000 by the end of 2025.
“These cuts reflect tough but necessary decisions as Intel streamlines its operations,” shared industry observer ProducerCities on X
What’s Holding Intel Back?
Intel is battling several headwinds:
- Slower PC recovery: Although PC shipments have started rebounding in 2025, demand remains well below pre-pandemic levels.
- Weak enterprise spending: Corporations are still cautious about IT spending, affecting Intel’s server chip sales.
- Fierce competition: Rivals like AMD and NVIDIA continue to gain market share in both data centers and AI segments.
- Manufacturing delays: Intel’s push to become a foundry leader has been slower than anticipated, adding pressure to its transformation timeline.
Intel is investing in Gaudi AI accelerators, but its market share is still far behind NVIDIA’s, and AI revenue hasn’t scaled yet.
Is AI Not Helping Intel Yet?
While AI chips are dominating industry headlines, Intel’s position in this market is not as strong as NVIDIA’s. The company is investing heavily in Gaudi AI accelerators, but revenue from these chips remains a small fraction of the overall business.
Intel also acknowledged that AI PC adoption will take time to become mainstream, meaning any boost from AI-driven demand may not be reflected in near-term earnings.
How Are Investors Reacting?
The nearly 6% drop in Intel shares reflects investor frustration over the slow pace of Intel’s recovery and lack of aggressive growth in high-demand segments like AI and cloud. Analysts are also concerned about margin pressure, especially as Intel tries to balance cost-cutting with capital investment in fabs and R&D.
“Intel’s transformation is real, but the market is not going to wait forever,” said one analyst on Yahoo Finance.
Despite the disappointment, some experts suggest that the long-term prospects for Intel remain intact, especially as the company continues to build out its manufacturing capabilities in the US and Europe.
Can Intel Turn It Around?
Intel’s leadership remains committed to turning the company around. CEO Lip‑Bu Tan said during the earnings call that “we are executing to our strategy and remain focused on our long-term vision.”
He emphasized that Intel’s roadmap is progressing, including the launch of Intel 18A, its advanced process node, and strategic partnerships with global tech firms. He also hinted at a potential pivot from the delayed Intel 18A chip process to the more competitive 14A node.
However, he also admitted that “the macro environment is challenging, and execution must remain sharp.”
What Happens Next?
Looking ahead, Intel will need to:
- Deliver clear results in its AI and foundry efforts
- Show quarter-on-quarter growth in PC and data center chips
- Manage expenses effectively while investing for the future
- Regain investor confidence through transparency and performance.
Final Take: Is the Intel Shares Drop a Warning Sign?
Yes, it’s a signal that investors need more than words; they need results. The Intel shares’ drop underlines a key truth: even legacy tech giants must adapt quickly in a fast-changing market.
Intel still has the scale, talent, and roadmap to succeed, but execution and timing will determine whether this temporary stumble becomes a lasting setback or a setup for a stronger comeback.
FAQ’S
Investors may hesitate due to Intel’s weak earnings outlook, intense competition, and ongoing restructuring challenges.
Intel’s shares dropped because of disappointing Q3 guidance, job cuts, and slower progress in AI and manufacturing.
Yes, with strong leadership, foundry investments, and AI development, Intel has long-term recovery potential.
Stock drops are linked to weak forecasts, major layoffs, and concerns about execution and technology delays.
Yes, Intel has a solid roadmap and global footprint, but success depends on timely innovation and market execution.
Intel could rebound in late 2025 if restructuring pays off and AI demand boosts chip sales.
Currently, AMD leads in performance and innovation in several segments, but Intel is working hard to catch up.
Analysts expect gradual growth if Intel meets AI goals and improves its manufacturing pace.
Intel is a publicly traded company owned by institutional and individual shareholders; it is not owned by one person.
Disclaimer
This content is for informational purposes only and not financial advice. Always conduct your research.