Mostly conservative guidance, but it is “conservative for a reason”. The -11% reaction is the market punishing visibility risk (GM, yields, ramp costs) more than questioning the long-term 18A narrative.
1) What’s driving the sell-off: execution or guidance?
~60% guidance / ~40% execution.
Guidance shock: weak Q1 revenue, EPS and gross margin tells investors the trough is not done, and that the ramp is still expensive. Markets hate “air pockets” in the next quarter.
Execution overhang: the key fear is not demand, it’s manufacturing discipline (yield learning curve, mix, cost per wafer, and how quickly GM can stabilise).
So this is less “Intel is broken” and more “the timeline is messy”.
2) If supply and yields improve after Q1, can 18A/14A re-anchor the story?
Yes, but only if Intel proves two things:
1. Yield + cost curve improves fast enough to stop gross margin bleeding
2. External customer traction is real, not just internal validation
18A can re-anchor the turnaround if Intel shows:
credible volume ramp (not just “in production”)
improving margins sequentially
at least 1–2 meaningful foundry wins with repeatable economics
14A is the “second act”: it matters for durability, but the market will not price it until 18A execution is visibly clean.
How the stock likely trades from here
Near term: headline-driven, volatile, “prove it” mode
Re-rating trigger: a quarter showing better-than-feared GM + ramp progress
Bear case: yields lag, GM stays pressured, and the market treats every bounce as sell-the-news
Bottom line: the sell-off is mainly a confidence/visibility reset. If post-Q1 yield and margin trajectory turns up, 18A can absolutely become the anchor that shifts Intel back into a credible multi-year turnaround.
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