Why Intel Is Gaining During a Bearish Day for Artificial Intelligence (AI) Stocks

Sophia Wesley
Sophia Wesley
4 Min Read

Intel (NASDAQ: INTC) stock was gaining ground in Tuesday’s trading, bucking a trend that was impacting artificial intelligence (AI) stocks. The semiconductor company’s share price was up 2.1% as of 3:13 p.m. ET, according to data from S&P Global Market Intelligence. Meanwhile, Nvidia was down 4.4%, and AMD was down 4.9%.

After the market closed on Friday, Bloomberg reported that Intel could receive up to $10 billion in additional grants and loans to support its chip fabrication business — funding allocated to boost the American semiconductor industry as part of the CHIPS Act. Because the market was closed Monday for Presidents Day, investors’ positive reactions to the news had to wait until Tuesday.

Intel is gaining despite macroeconomic concerns

AI stocks with growth-dependent valuations are broadly losing ground Tuesday as investors weigh inflationary risks. Home Depot published its earnings results before the market opened, and management stated that the continued impacts of inflation were causing customers to be more cautious with their spending. Those comments have left investors more concerned that the Federal Reserve may opt to wait longer before cutting benchmark interest rates.

Despite the uptick in perceived macroeconomic risks, Intel stock gained significant ground. It had been up by as much as 3.8% earlier in the day’s trading, but lost some ground as inflation concerns started to play a bigger role in moving the broader market.

Intel could deliver big news this week

Intel is scheduled to host a conference Wednesday during which it will provide updates on its foundry business. As the leading U.S.-based manufacturer of semiconductors, the company’s economic and geopolitical importance is on the rise.

Right now, Taiwan Semiconductor Manufacturing is the world’s leading manufacturer of the high-performance semiconductors used for artificial intelligence and other accelerated computing applications. But China has indicated that it could move to exert greater influence over Taiwan in the near future, and that poses major economic and security risks to the U.S. and other Western countries.

As a result of this dynamic, the U.S. and other nations are working to increase their domestic chip production capabilities — and Intel aims to make semiconductor fabrication a much bigger part of its business. Investors could get some major updates on the company’s evolving fab business Wednesday.

Should you invest $1,000 in Intel right now?

Before you buy stock in Intel, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Intel wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 20, 2024

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Home Depot, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

Why Intel Is Gaining During a Bearish Day for Artificial Intelligence (AI) Stocks was originally published by The Motley Fool

Share This Article