Intel Q1 earnings preview: will tariff fears create artificial demand surge?

When is Intel reporting?

Intel is set to announce its first-quarter 2025 earnings on Friday, 25 April at 6.00am AEST. Investors are closely watching how the company's performance might be temporarily boosted by recent market dynamics.

Q1 2025 earnings expectations

• Revenue: Intel's client computing segment is projected to see a year-over-year decline of approximately 9%, despite a surge in demand driven by anticipated tariffs.

Impact of tariff-driven demand

• The looming tariffs have prompted manufacturers to accelerate their chip purchases, a phenomenon known as 'pull-forward' demand. While this is expected to enhance Intel's immediate financial results, it may also result in a slowdown in the coming quarters as stockpiling needs are met
• Recent industry data indicates a 4.9% increase in PC shipments, largely due to tariff concerns rather than genuine market growth

This artificial demand spike could create a misleading impression of sustained growth, potentially overshadowing underlying weaknesses in Intel’s broader business segments. As such, while Q1 results may appear positive, the long-term outlook remains uncertain, with critical questions about Intel’s momentum beyond this temporary boost.

Client computing faces mixed outlook

Despite the pre-tariff buying surge, Intel’s client computing group, primarily focused on PC processors, is projected to report a year-over-year (YoY) revenue decline of around 9%. This continued decline highlights structural challenges even temporary demand boosts cannot fully overcome.

Notebook chip sales may show modest growth, but this incremental improvement represents a one-off event rather than a sustainable recovery. The temporary demand surge could lead to a significant inventory overhang, depressing future sales as customers reduce orders after satisfying their immediate needs.

Analysts warn of an impending 'inventory glut' that could significantly depress Intel’s sales performance in subsequent quarters, exacerbating existing business environment challenges.

Server segment struggles amid competition

While PC chip sales may temporarily stabilize, Intel’s server segment continues to underperform due to fierce competition from rivals like Advanced Micro Devices (AMD). Intel’s data centre business is facing persistent market share pressures from technologically superior competitors.

Server chip sales, previously Intel’s most profitable segment, have weakened as enterprise customers increasingly adopt alternative solutions. This shift poses significant challenges to Intel’s long-term business model, with temporary consumer segment gains insufficient to offset server market weaknesses. Given that server products typically generate higher margins than consumer segments, this segment’s continued struggles disproportionately affect Intel’s overall profitability. Analysts anticipate ongoing pressure on server-related revenues, counteracting any short-term gains from pre-tariff activity.

Investor sentiment and share price impact

Intel shares have faced significant pressure, recently declining by 3%, continuing a year-long underperformance marked by a 46.6% fall compared to substantial gains in indices like the US 500 and US Tech 100.

Investor scepticism remains high regarding Intel's ability to navigate competitive and technological challenges effectively. Current analyst consensus rates Intel shares as a 'Hold,' with an average price target of $24.62, suggesting limited upside potential without substantial evidence of sustainable improvement. For traders considering positions in Intel ahead of earnings, management commentary on post-tariff demand patterns will likely influence the share price more significantly than the Q1 results themselves.

Future quarter outlook amid tariff concerns

A major concern for Intel is potential weakness in Q2 and beyond as artificial demand fades. Analysts expect a demand vacuum once inventories have been stocked, potentially leading to disappointing sequential performance guidance during Intel’s Q1 earnings call. The tariff-driven surge complicates inventory management and production planning. Intel must balance meeting current elevated demand without creating excess capacity that becomes underutilised once buying pressure subsides.

Technical analysis

Intel’s challenging performance continued into 2025, with recent volatility briefly pushing the share price below critical support around $19. Although holding this support area, a sustained break lower could bring the 2010 low at $17.66 into focus. A deeper drop below this level would open potential downside towards the 2009 low at $12.15.

Intel monthly chart