Fitch Ratings downgraded Intel’s credit rating one notch to BBB from BBB+ on Monday, with a negative outlook, just two levels above “junk” status.
The downgrade signals significant challenges for the U.S. chipmaker in maintaining both market demand and financial stability. This arrives at a particularly difficult time for Intel, which is already facing considerable headwinds.
The news comes on the heels of Intel’s Q2 2025 earnings report released nearly two weeks ago. Crippled by substantial losses and struggles in its foundry business, Intel’s stock has plummeted, facing a 11.36% decline in the month leading up to Monday’s close. Its market capitalization has shrunk to $85.3 billion, a fraction of its primary rival AMD’s $286.6 billion valuation.
While Q2 revenue offered a slight respite, halting a series of consecutive declines, the massive losses and extensive restructuring have remained the focal point for market observers.
In an effort to reverse its financial woes, Intel has announced a series of strategic moves, including a 15% workforce reduction, the cancellation of multiple European factory projects, and a slowdown in the development of its Ohio-based wafer fabrication plant.
However, market sentiment towards Intel’s prospects remains largely pessimistic.
In its report on Monday, Fitch highlighted the increasing difficulties Intel faces in maintaining product demand, noting intensifying competition from rivals such as NXP Semiconductors, Broadcom, and AMD. Slower growth in global consumer electronics and enterprise markets is further exacerbating the company’s operational pressures.
“Credit metrics remain weak, and a return to levels commensurate with the prior rating is predicated on end-market strengthening, successful product upgrades, and net debt reduction over the next 12-14 months,” Fitch analysts wrote in their report.
Fitch added that despite Intel’s superior market position compared to other similarly rated companies, its financial structure is relatively weaker and subject to “high execution risk.”
While Intel still maintains a strong market position in providing chips for PCs and traditional enterprise servers, Fitch warned of increasing competition in the PC sector from Qualcomm and AMD.
Fitch’s negative outlook for Intel also stems from the stronger financial structures and more stable market positions of its competitors.
Fitch stated that Intel needs to improve PC chip shipments while simultaneously reducing debt on its balance sheet to regain its previous credit rating.
The rating agency described Intel’s liquidity position as “solid,” citing $21.2 billion in cash, cash equivalents, and short-term investments, as well as $7 billion in available credit as of June 28.
S&P Global Ratings also downgraded Intel’s credit rating from BBB+ to BBB last December, and Moody’s Investors Service lowered Intel’s senior unsecured debt rating last August.
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