Intel stock falls 5% amid semiconductor pullback

Intel shares fell about 5% on Thursday as semiconductor stocks extended a sectorwide pullback, even though the chipmaker is up more than 200% year to date. The VanEck Semiconductor ETF dropped about 3% after a first-half gain of more than 70%, its strongest opening six months since the fund launched in 2000. Chip-equipment makers Teradyne and KLA each fell roughly 8%. Nvidia declined 1.2% and Micron lost 3.4%.

HSBC raised its price target on Intel to $200 from $100 while maintaining a Buy rating, a level the bank described as the highest on Wall Street. In a client note, HSBC analyst Frank Lee wrote, “Intel is well positioned to deliver upside to 2026/27 server CPU shipments, driven by internal foundry capacity reallocation.”

HSBC increased its estimate for 2026 server CPU shipment growth to 25% year over year from 20% and projects Intel’s 2026 data center and AI revenue at $24.1 billion, about 4% above consensus. For 2027 the firm raised its server CPU shipment growth estimate to 30% from 20% and forecast $33 billion in data center and AI revenue, roughly 20% above consensus.

The bank added Intel Foundry to its valuation model, citing industry capacity constraints that are prompting customers to consider alternatives to their usual suppliers. HSBC noted that TSMC’s additional 3nm capacity is not expected until the second half of 2027 and pointed to reported customer wins with Terafab and Apple and ongoing engagement with Google and Nvidia as indications of external demand for Intel’s foundry services.

HSBC highlighted Intel’s Embedded Multi-die Interconnect Bridge, or EMIB, as a packaging technology with greater scalability than some competitors. The bank described packaging capacity as a bottleneck across the industry and expects increasing commitments from external foundry customers beginning in the second half of 2026 as demand for manufacturing capacity expands.

Despite Thursday’s decline, Intel remains one of the market’s top performers this year. The stock’s year-to-date gain exceeds 200%; HSBC and other analysts have pointed to demand for server CPUs, expanded manufacturing capacity and packaging technology in forecasts and company assessments.