Intel Corporation Shares Slide 6.43% to $96.32 as AI Slowdown Debate Sends Chip Stocks Reeling Once More

SANTA CLARA, Calif. — Shares of Intel Corp. fell 6.43% to $96.32 in Monday trading, down $6.62, as renewed calls from leading artificial intelligence executives to slow the pace of AI development triggered a broad selloff across semiconductor stocks worldwide.

The decline pushed Intel down from its September 11 close of $102.94, marking one of the steeper single-day drops among major chipmakers Monday. The selling began overseas, with declines across semiconductor stocks in Asia and Europe before U.S. markets opened, and extended into premarket trading on Wall Street as investors weighed the implications of a potential industry-wide pullback in AI capability development for future spending on chips and data center infrastructure.

The catalyst was a weekend essay published by Anthropic Chief Executive Officer Dario Amodei, who called for a coordinated slowdown in frontier AI development, arguing that AI capabilities were advancing faster than the safety measures needed to manage them responsibly. OpenAI CEO Sam Altman echoed the sentiment shortly afterward, saying AI companies need to pace the frontier, while Tesla and xAI chief Elon Musk also expressed support for Amodei's position. The alignment among several of the industry's most prominent and often rival executives added weight to investors' reassessment of the pace at which AI infrastructure spending might continue.

The broader market reaction was pronounced. The Nasdaq Composite fell as much as 1.9% and the S&P 500 dropped roughly 0.8% in early trading, reflecting a broad risk-off tone that hit growth-oriented technology names particularly hard. Enterprise software stocks moved in the opposite direction, climbing sharply as investors rotated into companies seen as less directly exposed to a potential slowdown in AI hardware demand, a divergence that underscored how unevenly Monday's AI safety debate was being priced across different corners of the technology sector.

Intel's decline came against the backdrop of a notably strong run for the stock heading into Monday's session. Shares had climbed from the low $90s to above $100 in recent weeks, part of a broader rally that saw the stock surge more than 9% in a single prior session, according to trading data reviewed by market analysts. That sharp run-up left the stock vulnerable to the kind of pullback seen Monday, with some traders characterizing the decline as, at least in part, a typical giveback following an outsized short-term gain rather than a reflection of any single new negative development specific to Intel.

Compounding the pressure on Intel Monday, Apple has told developers on the Mac App Store that they may drop support for Intel-based Macs in applications requiring macOS 13 or later, a move that further accelerates the fade of Intel chips from Apple's computer lineup. While Intel's business has increasingly diversified away from its legacy relationship with Apple in recent years, the announcement added another layer of psychological pressure to a stock already under strain from the broader semiconductor selloff.

Wall Street's response to Intel's recent rally has remained notably cautious even as the shares have climbed. Bernstein Research analyst Stacy Rasgon reaffirmed his Neutral rating on Intel following the stock's advance, maintaining a price target of $110, which implied roughly 7% upside from Friday's close before Monday's decline. That relatively measured stance echoed a similar move from Piper Sandler, where analyst David O'Connor initiated coverage of Intel with a Neutral rating and a matching $110 price target just a day earlier, arguing that much of the stock's recent rally had already priced in the company's turnaround prospects. Those targets compare with an average analyst price target of roughly $115.74, suggesting a range of views on Wall Street about how much further room Intel shares have to run even after their substantial gains over the past year.

Despite the cautious analyst commentary, Intel's underlying financial picture has shown signs of improvement. The company has posted revenue growth of roughly 25.4% year-over-year in its most recent reporting period, and while it continues to report negative earnings on a net basis, Intel has generated solid operating cash flow, providing fuel for its ongoing turnaround efforts and continued investment in domestic chip manufacturing capacity. That combination of strong top-line growth alongside continued profitability challenges has left analysts divided on how to value the stock, particularly as it has traded with elevated volatility, with an annualized volatility reading near 47% in recent weeks.

Intel's manufacturing ambitions have positioned the company as a potential long-term beneficiary of efforts to expand domestic semiconductor production capacity, even as it continues to face intense competitive pressure from Nvidia and AMD in the AI accelerator market that has driven much of the sector's growth in recent years. That competitive dynamic has left Intel in a somewhat different position than some of its peers heading into Monday's selloff, with the stock's fortunes tied as much to its own turnaround narrative and manufacturing buildout as to the broader debate over the pace of frontier AI development.

With the Federal Reserve's policy decision scheduled for September 16 adding a further layer of uncertainty to markets already grappling with the fallout from the weekend's AI safety debate, investors are likely to remain focused in the coming sessions on whether Monday's decline in Intel and other chipmakers proves to be a lasting repricing of the sector or a shorter-term pullback within a longer rally that has defined much of the semiconductor industry's performance over the past year.

Source: https://www.ibtimes.com.au/intel-shares-fall-ai-slowdown-chip-selloff-1875501