Dear Reader,
Twenty-six years ago, I started a hedge fund firm from my kitchen table that would go on to grow to more than $200 million.
I've been inside the rooms where economic decisions are made. I've spoken with U.S. presidents. I've worked alongside some of the most successful investors in the world.
But I've never seen a shift quite like the one happening right now.
Young people are graduating with more debt than they can carry.
Jobs don't pay what they used to.
Home prices are detached from reality.
Basic costs... childcare, food, healthcare... keep climbing.
And now... the rise of AI threatens to change everything.
Our financial system is breaking apart.
One Wall Street strategist recently warned of a "violent reset"... with the potential for real social unrest in the months ahead.
There is a way to navigate this moment.
But it won't be found in the strategies that worked 10 years ago.
That's why I've laid out exactly what I believe is happening... and what to do about it.
Click here to see what I mean, while you still can.
Regards,
Whitney Tilson
Editor, Stansberry's Investment Advisory
Intel's 21% Sell-Off Looks Ugly—But the Numbers Tell Another Story
Submitted by Jeffrey Neal Johnson. Posted: 1/27/2026.
In Brief
- Intel delivered fourth-quarter results that exceeded analyst expectations on both the top and bottom lines, despite manufacturing supply constraints.
- Strategic investments from industry leaders and a solid cash position provide the company with a financial safety net to execute its manufacturing roadmap.
- The current stock valuation suggests the market has priced in challenges that management expects to resolve as manufacturing yields improve later this year.
Investors detest uncertainty, and the stock market has a habit of punishing it harshly. In the days following its fourth-quarter earnings report, Intel (NASDAQ: INTC) stock suffered a violent sell-off, falling roughly 21% to trade in the low $40s. The drop was swift and brutal, erasing billions of dollars in market capitalization in less than a week as institutional and retail traders rushed to the exits. To the casual observer, the red ink on the chart looks like a disaster and suggests a company in deep distress, potentially losing its grip on a competitive market.
However, a disciplined review of the financial data reveals a disconnect between Intel’s stock price and the company’s operational performance. While the market panicked over future forecasts, Intel actually delivered a solid quarter.
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Discover how to invest in the fund Trump uses to collect this income >>The company reported revenue of $13.7 billion, decisively beating analyst expectations of $13.37 billion. On the bottom line, the results were even stronger. Non-GAAP earnings per share (EPS) were $0.15, nearly double the consensus estimate of $0.08.
Under normal circumstances, beating expectations on both the top and bottom lines would spark a rally. In this case, the opposite happened: the market is pricing in a permanent failure based on what looks like a temporary dislocation. For value investors willing to look past short-term volatility and sensational headlines, this sell-off may present a rare entry point into a blue-chip technology giant trading at a distressed price.
The Revenue Cliff: A Supply-Chain Story
If the fourth-quarter results were strong, why did the stock crash? The anxiety stems entirely from guidance for the first quarter of 2026. Management forecasted revenue between $11.7 billion and $12.7 billion. The midpoint of that range, $12.2 billion, missed Wall Street’s expectations and created a revenue cliff that spooked investors focused on short-term growth models.
Context matters. This reduction in guidance was not caused by a lack of customers or canceled orders. Instead, it is driven by severe supply constraints. According to CFO David Zinsner, the company has effectively depleted its buffer inventory—Intel sold through much of the chips it had on hand in late 2025. The company is entering 2026 in a hand-to-mouth position, unable to manufacture chips fast enough to meet growing demand.
This supply bottleneck is a direct result of the company’s aggressive technology transition. Intel is ramping up production of its 18A node, an advanced manufacturing process critical to its future competitiveness.
Products built on this node, such as the newly launched Core Ultra Series 3 (Panther Lake), are now shipping to customers. Advanced manufacturing is notoriously difficult, and CEO Lip-Bu Tan acknowledged that while manufacturing yields are improving steadily, they are not yet high enough to support full-volume production.
Faced with a silicon shortage, management made a strategic choice: prioritize wafer supply for the Data Center and AI (DCAI) segment over the Client (PC) segment. Data center chips generally command higher profit margins than laptop or desktop chips. By allocating limited resources to its most profitable customers, Intel is protecting long-term financial health and relationships with major hyperscalers, even though it results in lower revenue for the current quarter.
Why the Bottom Won't Fall Out
During previous downturns in the semiconductor cycle, investors legitimately worried about Intel’s ability to meet obligations. That fear is no longer supported by the balance sheet. The company has built a sizeable financial safety net: Intel exited 2025 with $37.4 billion in cash and short-term investments. This liquidity provides ample runway to address yield issues without taking on new debt or diluting shareholders by issuing equity.
Further validation comes from a major external investor. In late 2025, Intel closed a $5 billion investment deal with NVIDIA. That NVIDIA—a dominant player in artificial intelligence—took a significant equity stake signals confidence in Intel’s manufacturing roadmap. For retail investors, NVIDIA’s bet is a meaningful vote of confidence and suggests the market panic over yields may be overblown.
Intel is also making progress in AI hardware without relying on costly or risky acquisitions. The collapse of the proposed SambaNova Systems deal was framed by some as a setback, but Intel’s organic progress tells a different story.
The company’s custom ASIC (Application-Specific Integrated Circuit) business has reached an annualized revenue run rate of $1 billion. ASICs are specialized chips for specific tasks, such as running AI models. That run rate demonstrates Intel can compete in AI hardware using its own engineering resources, reducing the need to spend on outside acquisitions.
Finally, valuation provides a hard floor for the stock. Trading in the low $40s, Intel is approaching a price-to-book ratio (P/B) of roughly 2x (up from as low as 0.8x at $19). This compares to high-growth peers like AMD (NASDAQ: AMD), which trade at higher multiples—often pricing in years of flawless execution. Intel, by contrast, is priced for disaster; much of the negative news about yields and supply is already baked into the stock, limiting further downside.
Front-Running the Supply Fix
The data suggests the first quarter of 2026 may mark Intel's operational trough. The supply constraints causing today’s pain are expected to ease starting in the second quarter. As yields on the 18A node improve, inventory buffers should rebuild, allowing revenue to trend back toward seasonal norms over the remainder of the year.
Institutional investors and analysts are already looking past the current dip. Following the earnings report, Citic Securities upgraded the stock to Buy with a price target of $60.30, while New Street Research raised its target to $50. These firms view the supply bottleneck as a temporary engineering challenge, not a permanent structural flaw.
For long-term investors, the roughly 21% drop now offers a compelling window of opportunity. It allows patient capital to buy more of a cash-rich American manufacturer at a distressed price, just before its factories catch up with demand. It also gives investors who exited too early a chance to reestablish a position, potentially ahead of a recovery where the falling knife may quickly reach a newly established, government-backed floor.
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