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Ouch. There's really no other way to summarize Intel's

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[INTC  Loading...      ()   ]  earnings, and there's little question that Intel's softness took Wall Street by surprise. Just look at the shellacking these shares are taking today.

But is the selloff warranted, or -- like so many other moves to the downside in recent weeks among the top names in tech -- is the Intel drubbing overdone?

You have to wonder when Intel suffers a 12 percent decline, even though the company enjoyed a nice, year-over-year pop on the topline and profit rose nicely.

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CNBC Investors' Edge:

• Intel Earnings History
• Who Owns Intel?
• Cramer's Top Tech Stocks

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Trouble is, neither number was in line with Wall Street's expectations and once again, we're playing the "good is not good enough" game with analysts covering the issue.

Intel missed; I'm not going to deny that that's a problem. I'm not going to deny that Intel's soft news bodes poorly for Dell

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[DELL  Loading...      ()   ] and Hewlett-Packard

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[HPQ  Loading...      ()   ], two of Intel's biggest customers yet to report their earnings. But dig a little deeper into these numbers and you might see some silver lining to the earnings cloud.

To wit, Intel's guidance for its first quarter came in at the low end of expectations -- the low end of the "range." Still in the "range" of Street expectations. Yet at the low end.

It's a problem.

It's disappointing.

But so disappointing that it's shaving better than $10 billion in Intel market cap in the blink of an eye? Come on.

Okay, couple the disappointing topline expectations with the lousy gross margins news. Oh wait, did I say "lousy?" Intel's fourth-quarter gross margin hit 58 percent, a nice sequential increase from the 52.4 percent in the third quarter. A year ago, Intel was at an anemic -- for Intel, anyway -- 49.6 percent.

Intel's gross margin in the first quarter should drop to 56 percent, and 57 percent for all of 2008, plus or minus a point or two.

I spoke to CEO Paul Otellini last week at the Consumer Electronics Show and asked him whether he was worried about a recession. The simple response? "No."

And even if there were a recession in this country, Intel derives better than 75 percent of its revenue from overseas customers. And the CEO detected no signs whatsoever of a global recession.

Same goes with the company's chief financial officer, whom I spoke with yesterday following the news. This is the first quarterly earnings that Stacy Smith, taking over for long-time CFO Andy Bryant, has presided over. Talk about a baptism by fire. He was honest, up front -- and tried to paint a rosier, broader picture than the cold hard numbers might indicate.

He told me the company was pleased with the quarter's performance, that so much is going right for Intel, that longer term trends seem very strong indeed -- with no signs of recession.

Still, he told me, "We'd be crazy not to be concerned about what we're seeing based on economic indicators. However, we didn't see a slowdown in our computing business as we went through the fourth quarter." Nor is he predicting a slowdown in the first quarter. A little cautious, but "the business grew nicely."

That's reasonable. Nothing crazy one way or the other. Just, well, reasonable. And for that, Intel shares are getting clobbered. The Vista upgrade cycle continues. Intel's innovation down to the higher margin, better-performing 45 nanometer technology continues. Global infrastructure build-outs and hardware upgrades continue.

Intel is trying to be reasonable in its outlook, realistic in its expectations, guiding the Street to how the company is performing.

It's a shame the Street can't return the favor.

The selloff seems way overdone. I get that Intel needs to feel some pain; that expectations were higher than reality and that Intel shares would suffer the consequences. But a selloff like this one seems to ignore the longer term trends that are shaping up nicely for Intel.

Neutral on Intel right now makes sense, as we wait to see what happens next with the broader economy. But bruised and battered like these shares are today? Nope.

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