Intel’s stock is declining after the company issued guidance for the first quarter that falls short of Wall Street’s expectations. The stock dropped 12% in premarket trading as Intel forecasts earnings per share to break even and anticipates revenue short of the consensus by $360 million.
In contrast, Intel’s fourth-quarter results were better than expected, with adjusted earnings per share at $0.15, exceeding projections by $0.07. Revenue also surpassed predictions, reaching $13.7 billion, which was over $300 million more than expected. However, ongoing supply constraints threaten to impact the company’s performance in the first quarter of 2026.
Intel has set its first quarter sales estimate between $11.7 billion and $12.7 billion, with the midpoint at $12.2 billion, which is $360 million below Wall Street’s consensus. The company’s aim to break-even on earnings per share contrasts with expectations for a profit of $0.05. These announcements led Intel shares to plummet from $54.32 to $47.50 in premarket trading.
Price targets for Intel stock vary, with an average of $46.89, the highest at $65 and the lowest at $30. Some believe supply issues with Intel’s CPU products will impact results, but there’s a belief that contracts with Apple could elevate future performance. Despite this setback, most analysts are optimistic about Intel’s prospects in 2026.
Given the big drop in Intel’s stock today, January 23rd, the most immediate change we are seeing is a spike in implied volatility. This means the price of options has gone up significantly because everyone expects bigger price swings in the near future. This makes selling options, rather than just buying them, an attractive strategy for us to consider.
For those of us who believe this guidance signals more pain ahead, buying put options with February or March expiration dates is a straightforward trade. We are watching the $44 support level, which was a point of resistance back in December 2025. If the stock breaks cleanly below that level, it could easily head toward the 50-day average near $40, making puts with a $42.50 or $40 strike price look appealing.
On the other hand, some of us see this 12% drop as an overreaction, especially since the Q4 2025 results were solid. Selling cash-secured puts below the current market price, perhaps at the $42 or $40 strike levels, lets us collect the high premiums caused by the panic. If the stock stays above our strike, we keep the income; if it falls, we get to buy shares at a level we were already comfortable with.
We need to remember the broader market context from the past couple of years, looking back from our perspective in 2026. The entire semiconductor sector, as tracked by the SOXX index, gained over 60% in 2023, showing massive investor appetite for chip stocks driven by the AI narrative. Intel’s own 150% rally in the last year was part of this trend, suggesting this current issue may be a temporary, company-specific problem rather than a new industry-wide downturn.
If we agree with the analysts who are bullish on Intel’s long-term turnaround, buying longer-dated call options is a capital-efficient way to bet on a recovery later this year. By purchasing calls that expire in June or even September, we give the company time to resolve its supply constraints and get past this weak first quarter. This strategy allows us to profit from a potential rebound toward the $54 highs without having to buy the stock itself.
