INTC, AMD, AVGO, Other Chip Stocks Rebound Premarket: Cathie Wood Trims AMD Holding Further

• Cathie Wood’s ARK Invest sold another $13 million worth of AMD shares on Tuesday, extending its recent streak of selling the chipmaker’s stock.
• Stocktwits sentiment for the iShares Semiconductor ETF (SOXX) flipped to ‘bearish’ from ‘bullish.’
• Investors would now turn to the Fed’s rate decision due at 2 pm ET.

Major chip stocks rallied in early premarket trading on Wednesday, extending gains fueled by optimism over a potential U.S.-Iran peace deal, despite a brief pause in momentum the previous session.

Intel stock gained 5.3%, leading the gains. Advanced Micro Devices stock gained 3.8%, and Broadcom stock gained 2.3%. The iShares Semiconductor ETF (SOXX) gained 3%, while Nvidia shares rose 0.5%.

Chip stocks are rebounding after sharp declines on Tuesday, a cooling-off following the early-week rally sparked by the U.S.-Iran peace deal. U.S. stocks declined as well, and were rising in Wednesday’s premarket session.

The moves come even as investors turn to the Federal Reserve’s rate decision, due at 2 pm ET. Economists expect the central bank to keep the rate unchanged in the 3.50%-3.75% range, according to a Reuters poll.

Mixed Signals For Chip Sector

The rally also signals that investors remain cautiously bullish on the chips sector, even after multi-hold increases in several key stocks amid an incredible demand for semiconductors from data centers.

Intel and ARM Holdings stocks have climbed over 200% this year, while AMD is up 137%. The momentum is also evident in the shares of key players in the data center industry, including networking gear and photonic component sellers.

On Stocktwits, the retail sentiment remained ‘bearish’ for INTC, AMD, and AVGO, investors questioned whether the gains were sustainable. The retail sentiment for SOXX flipped to ‘bearish’ from ‘bullish.’

“$SOXX Astonishing to see how relentless the semiconductor sector is. Even a day like that. All the liquidity gets drained out of every other name to go there. It's concerning,” a trader said.

Cathie Wood’s ARK Investment Management sold more shares of AMD on Tuesday, according to its disclosure. Its funds sold 23,844 AMD shares worth $13 million. ARK has sold well over $250 million in AMD shares since the start of May, with selling accelerating in June as it raised cash for a massive SpaceX position.

US-Iran Inch Closer To Peace Deal

The U.S. and Iran announced on Sunday that they had agreed to a peace deal to end the fighting in the Middle East and reopen the Strait of Hormuz, sending global markets higher the next day. A formal deal is expected to be signed on Friday.

Senior U.S. officials have begun giving some details about the deal, briefing that the key sea route would reopen on Friday - the same day the deal is formally inked in Geneva.

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