Intel Shares Drop About 6% as Tech Stocks Pull Back

Intel shares fell about 6% on Tuesday as a broad technology selloff hit markets ahead of the first Federal Reserve interest-rate decision under Chair Kevin Warsh. The Nasdaq Composite dropped 0.5%, with Advanced Micro Devices down more than 4% and Broadcom off over 3%. Nvidia, Tesla and Microsoft each lost more than 1%. Most S&P 500 stocks traded higher and the Dow moved closer to record territory.

Falling oil prices helped push bond yields lower; Brent crude briefly slipped below $80 a barrel. Market participants described the day as a rebalancing of portfolios ahead of the Fed decision rather than a reaction to company-specific news.

Intel’s decline interrupted a rally that has pushed the stock up more than 200% over the past six months. The shares remain near the top of their 52-week range despite Tuesday’s drop.

Last Thursday, Bank of America Securities upgraded Intel to Buy from Underperform and raised its price target to $135 from $96. The firm pointed to stronger prospects in server central processing units and semiconductor manufacturing services and revised up its sales and earnings forecasts.

BofA estimated Intel’s server CPU business could generate about $40 billion in annual revenue by 2030. The bank placed the total addressable market for server CPUs at roughly $170 billion by the end of the decade, implying an Intel market share near one-quarter.

BofA also flagged Intel’s foundry unit as an emerging source of revenue. The segment remains unprofitable but is showing signs of customer traction, and the bank reported that Intel is negotiating manufacturing agreements with several large technology companies, including Apple and Terafab.

The bank noted institutional ownership of Intel remains relatively low for a company of its size; roughly 16% of major funds tracked by BofA hold the stock, up about 3 percentage points from the prior month. BofA suggested more fund managers could add positions if confidence holds.

Analysts warned of risks that could temper the outlook, including rising competition from companies using Arm’s architecture and a potential slower ramp in AI-related spending. BofA’s two-notch upgrade was an uncommon move that reflected increased conviction in Intel’s strategic direction.

Traders and portfolio managers warned volatility could persist as investors digest Fed policy under the new chair and reassess allocations to technology, describing Tuesday’s pullback in Intel as part of a broader rotation away from large-cap tech exposure.