Stock market today: S&P 500 clears 5th-straight record, Nasdaq hits fresh high as earnings, trade hopes bolster stocks

Wall Street remained skeptical of Intel (INTC) after the company left the future of its manufacturing business unclear during an earnings call late Thursday.

Intel stock dropped Friday despite its financial results beating expectations.

“While the headline numbers look decent vs expectations, we don’t think the numbers really mattered all that much,” Bernstein analyst Stacy Rasgon wrote in a note to clients Friday, saying instead that investors are focused on Intel’s manufacturing roadmap.

Intel, once a leading global chipmaker, has fallen behind its rivals, both with its own products and in its attempt to manufacture chips for outside customers.

Truist analyst William Stein said, “The road to recovery is long & uncertain” for Intel.

That’s because Intel had promised that its new manufacturing process, 18A, would bring in external customers to its cash-bleeding manufacturing business, which its former CEO Pat Gelsinger launched in 2021. Now, Intel says it will use 18A only for internal products, reaching peak production at the beginning of the next decade, and that it could “potentially” get “external customers at some point,” as CFO David Zinsner put it.

Meanwhile, Intel also left the future of its successor to 18A, the manufacturing process it calls 14A, unclear and contingent upon it getting an external customer on board.

Analysts and former Intel executives said it’s crucial for the company to prove it can execute 18A to draw in outside customers to use its manufacturing business in what’s known as a foundry.

“We raise concern on future competitiveness of both Products and Foundry, driven by constant roadmap changes, employee churn, as well as reduced investments in future products/nodes — pivotal in l-t [long term] market share and positioning,” Bank of America analyst Vivek Arya wrote.