Intel (NASDAQ: INTC) stock was gaining ground in Tuesday’s trading, bucking a trend that was impacting artificial intelligence (AI) stocks. The semiconductor company’s share price was up 2.1% as of three:13 p.m. ET, in response to data from S&P Global Market Intelligence. Meanwhile, Nvidia was down 4.4%, and AMD was down 4.9%.
After the market closed on Friday, Bloomberg reported that Intel could receive as much as $10 billion in additional grants and loans to support its chip fabrication business — funding allocated to boost the American semiconductor industry as a component of the CHIPS Act. For the reason that market was closed Monday for Presidents Day, investors’ positive reactions to the news needed to attend until Tuesday.
Intel is gaining despite macroeconomic concerns
AI stocks with growth-dependent valuations are broadly losing ground Tuesday as investors weigh inflationary risks. Home Depot published its earnings results before the market opened, and management stated that the continued impacts of inflation were causing customers to be more cautious with their spending. Those comments have left investors more concerned that the Federal Reserve may opt to attend longer before cutting benchmark rates of interest.
Despite the uptick in perceived macroeconomic risks, Intel stock gained significant ground. It had been up by as much as 3.8% earlier throughout the day’s trading, but lost some ground as inflation concerns began to play a much larger role in moving the broader market.
Intel could deliver big news this week
Intel is scheduled to host a conference Wednesday during which it’s going to supply updates on its foundry business. Since the leading U.S.-based manufacturer of semiconductors, the company’s economic and geopolitical importance is on the rise.
Immediately, Taiwan Semiconductor Manufacturing is the world’s leading manufacturer of the high-performance semiconductors used for artificial intelligence and other accelerated computing applications. But China has indicated that it could move to exert greater influence over Taiwan throughout the near future, and that poses major economic and security risks to the U.S. and other Western countries.
Consequently of this dynamic, the U.S. and other nations are working to increase their domestic chip production capabilities — and Intel goals to make semiconductor fabrication a much greater a component of its business. Investors could get some major updates on the company’s evolving fab business Wednesday.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Idiot has positions in and recommends Advanced Micro Devices, Home Depot, and Nvidia. The Motley Idiot recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Idiot has a disclosure policy.
Why Intel Is Gaining During a Bearish Day for Artificial Intelligence (AI) Stocks was originally published by The Motley Idiot