Intel’s AI Ambitions Face Investor Scrutiny as Shares Slide

Intel finds itself navigating turbulent waters as substantial investments in artificial intelligence initiatives collide with growing market skepticism about their profitability. A recent sell-off drove the chipmaker's stock to a four-week low, raising questions about whether the company can effectively compete with NVIDIA in the rapidly evolving AI sector.

Market technicians are observing concerning signals from both short-term and long-term moving averages, which currently suggest a bearish outlook for Intel shares. The stock now faces a critical test at a key support level around $35.50. This technical pressure comes amid broader concerns about whether Intel is positioned for a genuine trend reversal or merely experiencing a temporary setback within a longer-term upward trajectory. The company's upcoming quarterly results are expected to provide crucial direction.

Expansion Costs Weigh on Financial Outlook

The recent downward pressure was triggered by a sobering analyst report that significantly reduced profit expectations for both 2025 and 2026. The primary factors behind these revised projections include compressed margins resulting from expensive expansions in Intel's AI PC division and intense competition in the lucrative GPU market, where NVIDIA continues to maintain dominance. These financial headwinds have left investors questioning Intel's ability to remain competitive in the AI race despite its substantial investments.

Should investors sell immediately? Or is it worth buying Intel?

Wall Street Maintains Cautious Stance

Financial institutions and research firms remain largely unconvinced about Intel's near-term prospects. The majority of market analysts have maintained their "hold" or "reduce" recommendations on the stock, reflecting widespread caution about the company's strategic direction. This professional skepticism contrasts with earlier optimism surrounding Intel's position in the AI boom.

Strategic Investments Face Profitability Test

Intel's current challenges emerge despite what initially appeared to be promising developments. The company had been benefiting from the artificial intelligence surge and secured both government funding through the CHIPS Act and valuable new partnerships. However, the recent stock decline indicates increasing doubts about the financial viability of Intel's expensive expansion strategy. The multibillion-dollar factory offensive and development of its foundry business represent particularly risky ventures in an increasingly competitive semiconductor landscape.