Why Short Sellers Are Betting Against Intel (INTC), the Most Shorted Dow Stock

"The foundry is a cash furnace. Intel Foundry lost $2.51 billion in Q4 alone, and cumulative foundry operating losses across all four quarters of 2025 totaled roughly $10.3 billion. Revenue is growing, but losses aren't narrowing meaningfully. CEO Lip-Bu Tan acknowledged on the earnings call: 'While yields are in line with our internal plans, they are still below what I want them to be.'"

"The core business is shrinking. The Client Computing Group (roughly 60% of revenue) declined 7% year-over-year in Q4 and was down in three of four quarters in 2025. Advanced Micro Devices' client segment, by contrast, surged 34% year-over-year in Q4 2025. Market share is moving away from Intel."

"For Q1 2026, Intel guided revenue of $11.7 billion to $12.7 billion, which would be a significant sequential decline from Q4's $13.67 billion. And it guided non-GAAP EPS of $0.00 and a GAAP loss of $0.21. Supply is expected to be at its tightest in Q1. This isn't a growth story."

Intel's stock has nearly doubled from $24 to $46 over the past year, but this appreciation outpaces underlying business fundamentals. While bulls cite Nvidia's $5 billion investment, government CHIPS Act funding of $8.9 billion, and Data Center & AI segment growth of 9% year-over-year, these positives mask structural problems. The Intel Foundry division lost $2.51 billion in Q4 alone with cumulative 2025 losses around $10.3 billion, while yields remain below management targets. The Client Computing Group, representing 60% of revenue, declined 7% year-over-year in Q4 and fell in three of four 2025 quarters, with market share shifting to AMD. Q1 2026 guidance projects significant sequential revenue decline and break-even to negative earnings. Trading at 85 times forward earnings while posting annual net losses, Intel's valuation appears disconnected from deteriorating fundamentals.

Read at 24/7 Wall St.