Intel’s stock is dropping after the company announced disappointing first-quarter guidance. In premarket trading, the stock fell by 12% as Intel predicted no earnings per share and forecasted revenue that is $360 million below Wall Street’s expectations. Last quarter, Intel’s results were better than anticipated, with adjusted earnings per share of $0.15, $0.07 higher than projections. Revenue hit $13.7 billion, exceeding expectations by over $300 million. However, ongoing supply issues could hurt the company in the first quarter of 2026. Intel estimates its first-quarter sales will be between $11.7 billion and $12.7 billion, with an average of $12.2 billion, which is $360 million lower than the consensus estimate. The company’s goal for earnings per share is to break even, while Wall Street expected a profit of $0.05. This news caused Intel shares to drop from $54.32 to $47.50 in premarket trading. Price targets for Intel stock vary, averaging $46.89, with the highest at $65 and the lowest at $30. Some believe supply issues with Intel’s CPUs will affect results, but contracts with Apple may improve future performance. Despite the current problems, most analysts remain optimistic about Intel’s future in 2026. Following the significant drop in Intel’s stock on January 23rd, we see a rise in implied volatility. This means options prices have increased due to expectations of larger price swings soon. This situation makes selling options an appealing strategy. For those who think this guidance points to more trouble, buying put options with February or March expiration dates is a straightforward move. We’re keeping an eye on the $44 support level, which was resistance in December 2025. If the stock falls below this point, it could easily approach the 50-day average around $40, making puts with a $42.50 or $40 strike price attractive. Conversely, some view this 12% drop as an overreaction, especially given the solid Q4 2025 results. Selling cash-secured puts below the current market price—at the $42 or $40 strike levels—allows us to collect high premiums from the panic. If the stock stays above our strike price, we keep the income; if it falls, we can buy shares at a price we’re comfortable with. We should also consider the broader market context from the last couple of years as we look at 2026. The semiconductor sector, tracked by the SOXX index, grew over 60% in 2023, showing strong investor interest, especially linked to AI advancements. Intel’s own 150% surge last year was part of this trend, indicating that this issue may be a short-term problem rather than a broader industry downturn. If we agree with the analysts who are optimistic about Intel’s long-term recovery, buying longer-dated call options could be a smart way to invest. By purchasing calls that expire in June or September, we give Intel time to resolve its supply issues and navigate through this weak first quarter. This strategy lets us profit from a potential rebound toward the $54 highs without needing to buy the stock directly.

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