Intel Stock Flashes Sell Signal After 20% Weekly Surge — But Retail Traders Position For More Gains

Intel Corp.’s (INTC) shares trended on Stocktwits late Sunday following a 20% weekly surge as rumors about potential investments from Apple (AAPL) and Taiwanese foundry TSMC (TSM) circulated rapidly.

The recent run-up in Intel stock has sent it deep into the overbought zone, suggesting it has risen too much, too fast, and could be ripe for profit-taking. The 14-day relative strength index (RSI) — a momentum indicator — reads 80.57, making it among the most overbought stocks in the S&P 500.

Intel’s stock has filled a gap from late July 2024 and trades at a new 52-week high, helped by hopes that the company, once considered America’s pride but has since lost its momentum, would return to its heyday.

SoftBank (SFTBY) set the ball rolling with a $2 billion commitment to Intel, followed by the U.S. government, which purchased 433.3 million Intel shares, giving it a 10% stake. Artificial intelligence (AI) stalwart Nvidia (NVDA) announced on Sept. 18 that it has agreed to buy Intel shares worth $5 billion. The two chipmakers are to jointly develop multiple generations of custom data center and PC products that accelerate applications and workloads across hyperscale, enterprise, and consumer markets.

CEO Lip-Bu Tan, who assumed the reins in March, has been quick with turnaround efforts, delaying foundry expansion plans and cutting costs. A Wall Street Journal report, published in early August, stated that Tan was seeking to raise new capital and acquire an AI firm to bolster the company, although the board was at odds with the new CEO.

On Stocktwits, retail sentiment toward Intel stock remained ‘extremely bullish’ (84/100) as of late Sunday, and the message volume on the stream was also ‘extremely high.’  

Wall Street analysts, however, remain wary about the stock. According to Koyfin, the consensus analyst’s price target for the stock is $25.13, implying approximately a 30% downside from Friday’s close.

A bullish user on Stocktwits stated that they would remain invested in the stock throughout the week.

Another watcher positioned for a short-squeeze rally. “The stock was brutally shorted, and now panic reigns. We are in the middle of a short squeeze,” they said. 

Short interest in the stock is at 2.30%, up from 1.40% in February 2024, but down from the highs of 3.20% in March this year.

After settling Friday’s session up 4.44% at $35.50, the stock rose 0.45% in the overnight hours, according to Yahoo Finance. Intel has gained nearly 72% this year and is now the 12th best-performing S&P 500 stock for the year-to-date period.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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