A prominent investment analyst warned Intel may be cutting too deep, eliminating "pivotal" resources in the name of short-term profits.

(Reuters) -Intel shares fell 8% in early trading on Friday after the chipmaker forecast steeper-than-expected quarterly losses and warned of a potential exit from its foundry business despite new CEO Lip-Bu Tan's turnaround plans.

Intel’s plans appeared to deflate investors. Intel shares took a hit, with Intel’s market value showing a loss of $8 billion at one point, according to Reuters. Meanwhile, AMD is riding the AI wave to greater sales, and Nvidia’s value has exploded over the past few years, also thanks to its AI-friendly chips.

"We are making hard but necessary decisions to streamline the organization," writes the tech giant's CEO in a memo to employees.

Intel Corporation's latest Q2 earnings have embedded several bombshell updates to its turnaround strategy. Click here to find out why INTC stock is a Hold.

After all, Lip-Bu Tan is not just tweaking the playbook for Intel stock – he’s rewriting it! Since stepping into the role in March 2025, Lip-Bu Tan has initiated a sweeping transformation that diverges sharply from the expansive, capital-heavy strategy of his predecessor, Pat Gelsinger.

It is beginning to look like Intel plans to milk the impending 18A manufacturing process for a long time. The 18A process is akin to a refined 2 nanometer

Intel delivered better-than-expected revenue for its second quarter and issued a fairly positive outlook for its third quarter, but other moves were in the spotlight as the company report | Intel CEO Lip Bu-Tan backed the company's 18A process technology as it continues to cut jobs and pull back on its factory build-outs.

Intel faces earnings pressure from restructuring and slow progress but shows long-term turnaround potential with CapEx cuts. Read why INTC stock is a strong buy.

Intel's headcount will shrink to around 75,000 by year's end, a reduction driven by both layoffs and attrition.