Key Takeaways:
Intel and AMD shares extended losses Tuesday as a semiconductor selloff deepened, with Intel falling 7.35 percent and AMD dropping 5.53 percent.
Intel shares fell 7.35 percent and AMD dropped 5.53 percent Tuesday as a semiconductor selloff deepened, with Nasdaq futures down 1.24 percent.
"Intel's foundry strategy shows greater management confidence in internal demand and interest from external foundry customers," Vivek Arya, analyst at Bank of America Securities, said. The firm estimates Intel could capture 8 percent to 10 percent of a roughly $380 billion wafer foundry market by 2030.
The decline tracked a broader risk-off session. Nasdaq futures fell 1.24 percent while S&P 500 futures shed 0.41 percent, as the 10-year Treasury yield rose to 4.74 percent and oil prices climbed. Intel closed Monday at $103.49 before sliding to $98.69 in premarket trading, while the stock's 52-week range spans $22.78 to $142.35.
The selloff comes as Intel digests a $20 billion equity raise that priced 210.5 million shares at $95, expanding outstanding shares by 4.8 percent. The stock trades at 62.3 times forward earnings, leaving little room for execution missteps. Wall Street's consensus rating is Hold, with a mean target of $114.88 across 48 analysts tracked by S&P Global.
A new SoftBank Group 13F filing added another layer of scrutiny. The filing shows Intel at 66.8 percent of SoftBank's disclosed U.S. long-equity portfolio, up from 33.6 percent at the end of March. But the increase reflects mark-to-market gains, not new buying — SoftBank held the same 86,956,522 Intel shares at both quarter-ends, with the position's value climbing from $3.84 billion to $12.14 billion as Intel's share price surged. SoftBank's original cost was $2 billion, or $23 per share.
Intel's technical picture shows a stock consolidating after a strong advance. The shares trade 40.2 percent above their 200-day simple moving average of $70.45 but 9.6 percent below the 50-day average of $109.24. The relative strength index sits at 52.50, a neutral reading, while the 20-day average of $97.15 sits below the 50-day average, suggesting near-term weakness. Key support sits at $89.50.
Analyst views remain split. Bank of America maintained a Buy rating with a $145 target, while JPMorgan holds a Sell rating at $85. UBS rates Intel Neutral with a $112 target. Of 48 ratings, 32 are Hold, 12 are Strong Buy, and two are Buy.
The semiconductor sector's decline has broader implications. Intel and AMD are the two dominant CPU manufacturers, and their simultaneous selloff could pressure related chip stocks and semiconductor ETFs. The iShares Semiconductor ETF carries a 5.53 percent weighting in Intel, while the SPDR NYSE Technology ETF holds a 5.86 percent stake.
Intel's forward P/E of 62.3 versus the technology sector average of 23.67 means the stock carries a significant premium that demands strong earnings delivery. The company's foundry buildout, which Bank of America projects could grow revenue from about $1.1 billion in 2026 to nearly $40 billion by 2030, remains the key swing factor for the stock's valuation. The next catalyst for Intel shares comes with the company's quarterly earnings report, where investors will gauge whether the foundry expansion is translating into customer wins and revenue growth.
This article is for informational purposes only and does not constitute investment advice.
