Why Did Intel Stock Drop Friday?

Intel shares fell 4-6% Friday despite crushing Q2 earnings expectations, with pro forma EPS of $0.42 nearly doubling the $0.21 consensus and revenue of $16.1 billion topping estimates of $14.3 billion. The sell-off came after GAAP results showed a $2.16 per-share loss, overshadowing what the company called its best sales performance in 15 years.

The chipmaker posted a 40.4% gross margin and generated $1.9 billion in positive free cash flow for the quarter. Management guided toward continued margin expansion and signaled potential GAAP profitability in Q3, but traders focused on the bottom-line loss rather than operational improvements.

The earnings beat marks a sharp turnaround from prior quarters, yet the market's negative reaction highlights persistent skepticism around Intel's restructuring efforts. The divergence between adjusted and GAAP results suggests ongoing restructuring charges are weighing on reported profitability even as core business metrics improve.