Intel Corp. ( INTC ) has been downgraded by Fitch Ratings, which cited growing pressure from rivals Advanced Micro Devices ( AMD ) and Qualcomm Inc. ( QCOM ) and the company's ongoing struggle to maintain demand for its semiconductor products.

Fitch Cuts Intel's Credit Rating To BBB With Negative Outlook

Fitch downgraded Intel's ( INTC ) long-term credit rating one notch from BBB+ to BBB on Monday and assigned a negative outlook, placing the chipmaker just two notches above junk status, reported Reuters.

The agency said Intel's ( INTC ) "credit metrics remain weak" and highlighted it needs stronger end-market demand, successful product ramps, and debt reduction over the next 12 to 14 months to regain its former rating.

Fitch analysts referred to the intense competition from AMD, Qualcomm ( QCOM ), Broadcom Inc. ( AVGO ) and NXP Semiconductors ( NXPI ) , saying the company faces increased challenges in maintaining demand. 

Despite Intel's ( INTC ) strong market presence in PCs and enterprise servers, Fitch warned of higher execution risk and a relatively weaker financial structure, the report added.

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Intel's ( INTC ) Financial Strain Persists Despite Revenue Beat

The downgrade follows Intel's ( INTC ) second-quarter results, which showed revenue of $12.86 billion, beating Wall Street's $11.91 billion forecast.

Still, the company posted an adjusted loss of 10 cents per share, missing expectations for a 1-cent profit. Client Computing revenue was down 3% year-over-year to $7.9 billion, while Data Center and AI rose 4% to $3.9 billion.

Fitch noted Intel's ( INTC ) liquidity remains "solid," backed by $21.2 billion in cash and short-term investments and an untapped $7 billion credit revolver.

CEO Lip-Bu Tan Launches Massive Overhaul

Intel ( INTC ) CEO Lip-Bu Tan, who took the helm in March, is leading a drastic restructuring. Intel ( INTC ) plans to cut its global workforce by roughly 31%—from nearly 109,000 to 75,000—by year-end.

The Foundry division alone faces a 15–20% workforce reduction. Intel ( INTC ) is also relocating assembly operations from Costa Rica to Vietnam and Malaysia and delaying its long-anticipated Ohio chip facility.

Intel ( INTC ) expects the third-quarter revenue to be between $12.6 billion and $13.6 billion and forecasts a 24-cent loss per share, worse than analyst expectations.

Price Action: Intel ( INTC ) shares rose 0.98% during Monday's regular trading session and edged up an additional 0.0015% in after-hours trading, according to Benzinga Pro.

Benzinga's Edge Stock Rankings indicate that INTC maintains a downward trend across short, medium and long-term periods. Further performance details are available here.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.