TLDR
- Intel (INTC) stock surged 8% Tuesday to lead S&P 500 gainers as semiconductor sector rallied on hopes U.S.-China trade restrictions could be eased
- The rally occurred despite company CFO stating initial production volumes for new 18A and 14A manufacturing technologies would be “insignificant”
- Intel’s foundry business won’t break even until 2027 according to management projections, with the stock down 30% over the past year
- Stock closed above both 50-day and 200-day moving averages on highest volume since April, indicating strong buying conviction
- Key resistance levels to watch are $23, $26, and $33, with major support at $19 level
Intel stock jumped nearly 8% Tuesday afternoon, leading gains on the S&P 500 as semiconductor stocks rallied across the board. The move came without any company-specific news driving the shares higher.
The broader semiconductor sector gained momentum on hopes that U.S.-China trade restrictions could be eased. Officials from both countries are reportedly holding trade talks in London this week, discussing export restrictions on various products including rare earth minerals and chips.
The PHLX Semiconductor Index has risen 2% in each of the past two trading sessions. Intel benefited from this sector-wide enthusiasm despite facing its own internal challenges.
The stock’s surge happened even as CFO David Zinsner recently revealed concerning details about the company’s foundry business. Speaking at a J.P. Morgan conference, Zinsner said initial production volumes for external customers on Intel’s upcoming 18A and 14A manufacturing technologies would be “insignificant.”
He also projected that the foundry business, which needs billions in revenue to become viable, won’t break even until 2027. This represents a long road for Intel’s turnaround plan.
The chipmaker has struggled over the past year, with shares falling more than 30%. The company disappointed investors with a weak second-quarter forecast earlier this year.
Some analysts suggested Intel’s first-quarter beat was merely due to customers pre-buying ahead of potential tariffs. The company has particularly struggled in data centers, where rivals AMD and Nvidia gained market share.
Technical Picture Shows Promise
From a technical standpoint, Intel shares found buying interest around the lower levels of a multi-month trading range. The stock closed above both its 50-day and 200-day moving averages on Tuesday.
The move higher occurred on the highest daily volume since early April. This indicates buying conviction from larger market participants rather than just retail interest.
The rally also pushed the relative strength index back above its neutral threshold. This signals accelerating price momentum for the stock.
Intel has remained rangebound since gapping sharply lower last August. The recent move suggests the stock may be ready to break out of this pattern.
Key Levels to Watch
Technical analysts are watching several crucial price levels for Intel going forward. The first resistance area sits at $23, near last month’s swing high.
If the stock breaks above that level, the next target becomes $26. This area marks the top of Intel’s multi-month trading range and features three prominent peaks formed between November and March.
A convincing breakout above the trading range could trigger a rapid move to $33. This target comes from applying the measuring principle to Intel’s chart pattern, representing nearly 50% upside from Tuesday’s closing price.
On the downside, investors should monitor the $19 level during any pullbacks. Intel shares would likely find support near the trading range’s lower trendline.
CEO Lip-Bu Tan, who took over in mid-March, has launched a major restructuring effort. The company is working to capitalize on the booming AI chip market where it has lagged competitors.
Despite Tuesday’s gains, Intel stock is up only about 10% so far in 2025. This trails the broader S&P 500’s performance but represents progress from the stock’s 52-week low of $17.66.
The VanEck Semiconductor ETF also gained 1.96% Tuesday, closing at $261.99 as the entire sector participated in the rally.