Intel Corporation (INTC) shares ended a turbulent week deep in the red, closing at $108.77 on Friday after a 6.2% single-day decline. The drop capped a weekly loss of approximately 12.9% since May 8, erasing gains from a brief rally fueled by reports of a potential chip manufacturing partnership with Apple Inc. (AAPL).
Market Context and Broader Decline
The selloff was part of a broader downturn in semiconductor stocks, with the Philadelphia Semiconductor Index falling 4% on Friday. Nvidia Corp. (NVDA) lost 4.4%, Advanced Micro Devices (AMD) sank 5.7%, and Intel followed suit, dragged down by renewed inflation worries that pushed Treasury yields and oil prices higher. "The market had gotten way ahead of itself" in the AI trade, said Kenny Polcari, chief market strategist at Slatestone Wealth.
CPU Market Share Losses
Adding to Intel's woes, new data from UBS revealed that the company lost server CPU market share in the first quarter. Intel's share dropped to 54.9%, while AMD grew to 27.4% and Arm Holdings (ARM) climbed to 17.7%. "Arm and AMD units outgrew and continued to gain share at the expense of Intel," UBS analyst Timothy Arcuri noted. This trend underscores Intel's challenges in its core business even as it pursues a foundry strategy.
Apple Deal and Foundry Ambitions
Earlier in the week, Intel shares surged on a report from Reuters, citing the Wall Street Journal, that the company had reached a preliminary agreement to manufacture chips for Apple devices. The deal was seen as a potential boost for Intel's foundry arm and U.S. chipmaking efforts, but details on volume, timeline, and specific chips remained scarce. The rally proved short-lived as profit-taking and broader market pressures took hold.
Financial Performance and Outlook
Intel reported first-quarter revenue of $13.6 billion, up 7% year-over-year, and guided second-quarter sales between $13.8 billion and $14.8 billion. CEO Lip-Bu Tan emphasized the "growing and essential role of the CPU in the AI era," while CFO David Zinsner cited stronger demand and improved supply. However, Intel Foundry posted a $2.4 billion loss for the quarter, though the company noted improvement from the prior period.
Analyst and Market Sentiment
The stock's recent rally has added over $440 billion to Intel's market cap since late March, while short sellers have accumulated more than $12 billion in paper losses, according to Bloomberg. Short interest remains near a 52-week high, indicating that many investors still bet against the stock. Analysts remain cautious: SemiAnalysis President Doug O'Loughlin noted that "TSMC is the real bottleneck," while Seaport Research's Jay Goldberg warned, "No company in history has ever fallen off the Moore's law curve and made it back on."
Technical Levels and Monday Outlook
Intel's Friday trading range spanned $105.02 to $110.57, with Thursday's close at $115.93 serving as a potential recovery target. Traders will watch chip futures, Treasury yields, and any updates on the Apple deal or other foundry customers. If the stock holds above Friday's low, selling pressure may ease, but a break below could signal further unwinding of the Apple-deal premium. A recovery toward $115.93 would indicate continued buyer interest, though the near-term outlook remains uncertain.
