Intel has recently announced disappointing financial forecasts for the second quarter of 2025. The company expects revenue to fall between $11.2 billion and $12.4 billion, missing Wall Street estimates of $12.82 billion, and projects earnings to merely break even, instead of the anticipated 6 cents per share. This news comes as Intel grapples with the impacts of U.S.-China trade tensions, which have led to increased tariff threats and stockpiling by Chinese customers according to Reuters.

The ongoing trade disputes pose additional challenges for Intel, as China remains its largest market. The company faces potential tariffs of up to 85% on semiconductors manufactured in the U.S. These tariffs could significantly affect Intel’s sales and were a contributing factor to the subdued financial forecast. In response to these pressures, Intel's shares dropped nearly 4% on the Frankfurt exchange, following a 6% decrease in after-hours trading.

Under the leadership of new CEO Lip-Bu Tan, Intel is focusing on streamlining operations to combat these financial challenges. The restructuring strategy includes cutting bureaucracy, enforcing a stricter return-to-office policy, and reducing internal meetings. Intel aims to decrease operating expenses to $17 billion in 2025, with further reductions planned for 2026, alongside cutting capital expenditures to $18 billion in 2025. The company's strategy also involves layoff plans and potential collaborations with major industry players like TSMC to bolster its semiconductor sector presence.