Intel Corp (INTC) shares dropped nearly 5% in Tuesday's premarket session, trading at $98.69, as a broad selloff hit technology and chip stocks. The decline was not linked to any Intel-specific news.

Intel, one of the world's largest semiconductor companies and a longtime leader in PC and data-center processors, has been working to expand its contract chip-manufacturing business.

Stock index futures pointed to a lower open across major benchmarks. Nasdaq futures were down 1.24%, while S&P 500 futures slipped 0.41%, with investors pulling back from higher-risk names ahead of the bell.

The pressure came from rising bond yields and oil prices. The 30-year U.S. Treasury yield settled at a 19-year high of 5.310% and was climbing again to 5.320% early Tuesday. Rising long-term yields tend to weigh on semiconductor and other growth-oriented stocks because they increase the discount applied to future earnings, and chipmaking is also a capital-intensive business where financing costs factor into large factory investments.

Intel was not alone in the drawdown. Marvell (MRVL) and Coherent (COHR) were both down more than 6% in premarket trading, while Micron (MU) fell more than 4%.

Chip Index Just Entered a New Bull Market

The timing of the pullback is notable. The PHLX Semiconductor Index (SOX), which tracks the largest U.S.-listed semiconductor companies, closed in a new bull market on Monday after surging 21% from its July 29 low. The index's exit from bear market territory took just 21 days, the fastest such transition since March 2020 and well below the historical average of 54 days.

Intel itself had climbed 26% during that run, while Micron jumped 37% and Nvidia gained 18%. The unexpected standout was Credo Technology, up 59% over the same stretch. Tuesday's slide marks a rough start to life in the new bull market.

Bank of America Stays Bullish on Foundry Strategy

Despite the pullback, Bank of America remains positive on Intel's longer-term direction. Analyst Vivek Arya said Intel's roughly $20 billion equity raise signals management confidence in internal demand and interest from external foundry customers.

Intel Foundry is the company's contract manufacturing arm, producing chips for outside customers as well as for Intel's own products. Intel established the dedicated foundry unit, originally branded Intel Foundry Services, in 2021 to compete for external orders in a market long dominated by Taiwan Semiconductor Manufacturing Co (TSM), with Samsung also among the leading contract manufacturers. The firm sees Intel capturing 8% to 10% of a roughly $380 billion wafer foundry market by 2030, and it projects Intel Foundry revenue growing from around $1.1 billion in 2026 to nearly $40 billion by 2030.

Bank of America cut its price target on Intel to $145 from $160 on August 12 but kept its Buy rating. UBS lowered its target to $112 on the same day, maintaining a Neutral stance.

Technical Picture

Intel is trading 40.2% above its 200-day simple moving average of $70.45, which supports the longer-term trend. However, the stock sits 9.6% below its 50-day SMA of $109.24, pointing to near-term softness, and the 20-day SMA of $97.15 is running below the 50-day SMA, another sign of short-term weakness. The relative strength index, a momentum indicator that ranges from 0 to 100, stands at a neutral 52.50.

Key support to watch is at $89.50, a level where buyers have stepped in before.

Analyst Consensus

Intel holds a Hold consensus rating across 50 analysts, with an average price target of $110. Forecasts range from a low of $71 to a high of $155.

Intel's Benzinga Edge Momentum score sits at 98.66, reflecting the stock's strong run before Tuesday's premarket slide.

Source: CoinCentral