Shares of Intel (INTC -3.97%) are falling on Wednesday. The semiconductor giant's stock lost 4.4% as of 3:30 p.m. ET and as much as 4.9% earlier in the day. The fall comes as the S&P 500 lost 0.2% and the Nasdaq Composite rose 0.3%.

A Citi research note revealed Intel's market share has fallen to a two-decade low as rival Arm Holdings makes significant gains.

Intel's market share hits historic low

Intel shares declined after a Citi research note published Wednesday highlighted a concerning trend for the chipmaker. The note revealed that Intel's share of chip shipments fell by more than 1.8% to 65.3% in the first quarter of 2025. That's the lowest level since Citi began modeling the industry in 2002.

This drop in market share comes as Arm Holdings made substantial gains, expanding its share to 13.6% in the first quarter from 10.8% in the fourth quarter of 2024. Advanced Micro Devices also ceded market share, but the company's stock was less affected by the news after the company announced a $6 billion stock buyback.

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Structural shift continues

The data highlights a troubling trend for the already embattled Intel. Arm's ultra energy-efficient chip design has traditionally dominated the mobile market, but lagged far behind Intel in laptops, data centers, and other markets. This looks to be shifting, at least for the time being. Despite the concerning news, Citi maintained its neutral rating on Intel stock.

I think a wait-and-see approach is valid here. I think Intel will eventually be able to turn the ship around, but it's far from guaranteed. How its new CEO handles the next year will speak volumes to its future.