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Intel Falls 2.6% After Hot Inflation Hits Chip Rally

The move underscores rate risk to a rally built on AI optimism around a nascent foundry push.

Overview

  • Intel shares fell 2.6% Wednesday after the Producer Price Index, a wholesale inflation gauge, jumped 1.4% in April and dented hopes for near-term rate cuts.
  • Bank of America raised its Intel price target to $96 but kept an underperform rating because any new foundry work would take years to reach volume production.
  • Reports point to a preliminary IntelApple manufacturing deal that remains early, with analysts not expecting meaningful output before 2028 and keeping it out of models for now.
  • Intel reported a $4.3 billion net loss in Q1 and a $2.4 billion loss in its foundry unit, and analysts warn 18A chip yields and early margin dilution could push the foundry’s 2027 breakeven goal back.
  • The stock has added more than $440 billion in market value since late March, even as short sellers absorbed about $12 billion in losses and kept positions near one-year highs.