Intel shares dropped 14% on Friday after the chipmaker delivered disappointing guidance, overshadowing a better-than-expected earnings report. During a fourth-quarter earnings call with analysts on Thursday, CEO Lip-Bu Tan acknowledged that Intel would be unable to meet full demand for its products, citing ongoing challenges with production efficiency, or yield, which remains below target. "We are on a multiyear journey," he said. "It will take time and resolve." The company projected first-quarter revenue between $11.7 billion and $12.7 billion, with adjusted earnings per share expected to be breakeven. These figures fell short of LSEG’s consensus estimates of $12.51 billion in revenue and 5 cents per share in earnings. Despite the upbeat results in the latest quarter, investor sentiment turned negative due to concerns about the company’s ability to scale production and regain market share. Over the past year, Intel’s stock has more than doubled, fueled by optimism around a turnaround following significant investments from the U.S. government, SoftBank, and Nvidia. However, the company’s foundry business—its effort to manufacture chips for other companies—has continued to lag behind competitors who are reaping massive profits from the data center AI boom. Investors were hoping for clearer signs of progress in attracting foundry customers, which could serve as the next catalyst for the stock. CFO David Zinsner told CNBC that customers for Intel’s next-generation 14A process technology are expected to emerge in the second half of the year. But analysts at RBC Capital Markets cautioned that meaningful revenue from these customers may not materialize until late 2028. Jefferies analysts expressed skepticism, writing, "We appreciate the recent excitement around opportunity for INTC but still don't see a clear path forward given further share loss, no AI strategy and unclear fab/packaging opportunities." While Intel exceeded Wall Street’s fourth-quarter earnings and revenue forecasts, the lack of confidence in its near-term trajectory led to a sharp selloff. The drop highlights growing concerns that despite progress in some areas, Intel still faces a steep climb to reclaim its former dominance in the semiconductor industry.