Needham has once again affirmed its Hold rating on Intel Corporation (NASDAQ: INTC) after the chip manufacturer reported its financial results for the fourth quarter of 2025. Despite beating earnings estimates for the quarter, Intel's forward guidance fell short of both Needham's projections and broader market expectations, leading to a cautious stance on the stock's near-term outlook.
Intel's shares have enjoyed a significant rise, currently trading close to their 52-week peak around $54.60. Over the past year, the chipmaker’s stock performance has been impressive, delivering a total return of approximately 151.83%, as tracked by InvestingPro data.
During Q4 2025, Intel posted results above anticipated levels. However, the company’s guidance for future quarters did not align with analyst optimism. The forward outlook suggested a shortfall in revenue expectations, which prompted Needham to retain its Hold rating. The company is currently trading at a price-to-earnings ratio of roughly 1200, supported by modest earnings of $0.05 per share in the trailing twelve months. These figures suggest that the stock is priced above its calculated fair value according to InvestingPro's analysis, despite forecasts indicating Intel will remain profitable throughout 2026.
A significant headwind for Intel remains the ongoing supply constraints, which are anticipated to cause the company to underdeliver relative to demand for the duration of the year. These supply challenges are expected to intensify following the conclusion of the first quarter of 2026. Nevertheless, Intel's financials display a stable profile with a debt-to-equity ratio of 0.44 and a current ratio of 1.6, indicating a moderate level of leverage and a solid liquidity position.
The guidance for the first quarter's gross margin was also lower than Needham had forecasted, an outcome primarily attributable to issues around product mix and a conservative revenue projection. Still, Intel projects the gross margin will experience a steady improvement as the year progresses. For context, the company’s gross profit margin averaged 33.02% over the past twelve months — a critical metric for a semiconductor giant with a market capitalization nearing $271 billion.
Intel's foundry segment shows progress, specifically with yield improvements in its 18A process technology. Customer decisions on the 14A process technology are expected in the latter half of 2026, with active engagement currently underway involving the process design kit.
Investor response to Intel’s recent earnings and revenue disclosures has been mixed. RBC Capital Markets acknowledged the stronger-than-expected fourth-quarter outcome but noted concerns regarding a weaker predicted first-quarter 2026 performance. The firm lowered its price target from $50 to $48 while maintaining its Sector Perform rating. Similarly, Mizuho increased its price target to $48 from $41 despite Intel’s first-quarter revenue guidance falling short of the consensus, highlighting an anticipated decline in Intel’s gross margin to 34.5%, underwhelming compared to market expectations.
Evercore ISI raised its price target to $45 from $41.10, noting mixed quarterly results and guidance that was slightly below seasonal norms due to internal supply limitations. JPMorgan also lifted its price target to $35 from $30, citing robust server CPU demand which drove stronger than expected results, despite the company's cautionary guidance.
Conversely, BofA Securities reiterated an Underperform rating with a $40 price target, expressing skepticism about Intel’s capacity to maintain a competitive business model amid current challenges. The diversity of analyst viewpoints outlines the complex scenario Intel faces in balancing solid recent performance with headwinds affecting its operating outlook.