It was with more than a little sheepishness that I recently admitted to selling the entirety of my stake in Intel just a month after taking a flyer on the stock in August of 2024.
It’s rare that I demonstrate so little in the way of discipline, particularly in the context of individual stocks, which I generally buy only if I’m comfortable holding them forever, if not literally then at least “forever and a day,” colloquially.
Looking back on it now, I can’t say why I was so impatient with Intel. I knew it’d be dead money for a time, and maybe even for a very long time, when I bought it. I don’t have “life regrets” in any conventional sense but… well, if the question last month was whether I regretted selling Intel, the answer was an unavoidable (and resounding) “yes.”
Fast forward two weeks and Intel stormed higher still, extending its 2026 rally to an unthinkable (for Intel) 175%.
There’s the chart. It’s, um, farcical. That’s the best adjective I can come up with and I think readers will agree it’s apt, even if you’re buying (figuratively, literally or both) the turnaround story.
The catalyst on Tuesday was a Bloomberg report that Apple’s in “exploratory discussions” with Intel. Apple’s goal, presumably, is to de-risk its supply chain. In a world of intense geopolitical competition defined in no small part by a race to secure next-generation compute for AI systems, the world’s most important consumer electronics company doesn’t want to be totally beholden to Taiwan Semi for obvious reasons.
The linked Bloomberg piece was (very) careful to describe the talks with Intel as preliminary. There haven’t been any orders and Apple’s “concerns” about chips not made by TSMC could mean talks with Intel (and Samsung) don’t ultimately amount to anything.
But investors still riding a sugar high from last month’s historic semi rally didn’t care about the caveats and particulars. Intel — RSI 84, by the way — rose 14%, tacking another $60 billion onto a 2026 market cap gain in excess of $350 billion.
Consider the following. In September, after a ridiculous post-earnings rally which briefly made Larry Ellison the world’s richest person, Oracle was worth $935 billion. At the time, the market valued Intel at around $134 billion. As of Tuesday, Intel’s worth more than Oracle.
The SOX rose 4% Tuesday, pushing the index above 11,000 for the first time. It’s up 50% YTD, ~210% since the “Liberation Day” lows and its 14-day RSI has spent every session since April 13 in overbought territory.
Coming full circle, the saving grace for me psychologically is that notwithstanding my preference for “forever” holdings, if I’d held onto the Intel I bought in August of 2024, I would’ve certainly cashed in those chips late last month. In other words: I would’ve missed this leg of the rally either way.
After the bell on Wall Street, AMD topped estimates and gave a strong outlook. The stock, which was already up nearly 70% for the year, rose nearly 15% in after-hours trading, setting the shares up for new records on Wednesday.
Confession: I trimmed INTC into its report.
Tech stocks are hard to fathom sometimes.
I’m calling the top. 🙂
Just wait until Trump decides the government will sell its shares so he can distribute the “profits” to the next constituency that he somehow screwed over but needs to keep happy.
Alright, let’s try that again…
And…………..now
As a joke I bought SOXL to hold over the weekend to trigger a pullback. Thinking CTA buying was done now that April was over. I’m selling after I type this paragraph, good lord. Semis are all self-referential (lest we forget that flowchart that was circling around last year). Therefore, it’s been hard shorting the index given that any good news from one stock feeds into all the deals it has with others and so on, and so on, and so on. This is a Jenga tower w/ the Mag names still holding a foundation. The calls for SPX 7300 (what Iran war?) seem to be coming true this week. Then it’s Tom Lee’s -15-20% drawdown until the Fall (giggity).
“if I’d held onto the Intel I bought in August of 2024, I would’ve certainly cashed in those chips late last month.”
I did stubbornly hold onto that stock and endured the years of frustration. And like JL, I trimmed half a couple of weeks ago. Over many years in many markets, I’ve really come to like that strategy when taking profits or trimming losses. It frees your thought processes up. As an added bonus, if you sell a chunk too early and it continues to run higher, you can sit around grouching about what an idiot you were for doing it. (As in “I left three months of living expenses on the table!)
Ah, I meant to post that as a standalone comment, not a reply to n3utra. His/her comment about the influence of baskets is spot on. For traders and even investors it can be helpful as in picking up a name when another firm in the basket soils the bed sheets. Or mighty frustrating when one of your holdings is tattooed because of the missteps of another company in the basket.
But in the case of first Micron and now Intel, I seriously wonder if the run-ups reflect AI bulls shifting away from GPU vendors (especially Nvidia) as the increasing supply of GPU alternatives may be starting to weigh on prices and margins. Just rotating rather than bailing on the whole AI trade. Hell, didn’t we recently see a similar rally in the shares of companies providing cooling systems or interconnects and even general wiring for datacenters?
At the risk of offending the many AI true believers here, that may be a sign that the whole rally is in danger of losing steam. These things happen in all vertical theme rallies. “Trees don’t grow to the sky” as some old curmudgeons mumble as they miss the next big thing like mRNA companies.
The valuations have gotten obscene. INTC and AMD at 10x+ revenue? I am an AI true believer, but what would it take to grow into those valuations? Is AI demand going to outpace Moore’s Law forever? I know earnings fundamentals aren’t driving the bus, but gravity still exists (probably).
All good derek! It’s Him, and it’s a name I picked back in 2004 for a video game character I made (Neutra) for City of Heroes that I’ve kept across all my accounts since. Some inspiration from Richard Neutra and some from trying to sound like an unknown particle.
To your point, agreed, the shift is happening and it has fueled a run that I don’t see crashing, but setting a new tree line to accept. The flows into the sector have been powerful. I doubt any of those investors are worried about a crash. A lot has been catch up all of last month as has been outlined here. The “vibes” are that we’re going to float in a 7000+ range now that we broke, regardless of macro headlines.
Until a real exogenous shock happens (doubtful IMO, the coordination seems all but steady) we’ll be here until price suddenly shows a regime change that could happen for any random reason, why try and guess. That or Trump announces an indirect net-short position via tweet, which given all the other ‘signals’ he’s given wouldn’t be surprising.
As you well know, your experience is just part of the investing game. I have been there and done that a lot lately. Today’s market gyrations precipitates it. So, you have lots of company
Yep. I have missed a 10x on PLTR and 6x on MU just in the past couple of years.
Atleast I have AMD…
What puzzles me is how indiscriminate the run-up in chip stocks seems to be. Not all of the chip makers build chips that are readily compatible with the most obvious needs of the AI buildout. Some specialize in chips for phones, automotive applications, and other uses. Suddenly, it is as if all chips are worth their weight in gold. (Meanwhile Nvidia has been down for five days in a row.) I get that companies that plan to expand their use of AI have different needs than the companies that will provide it. Is there perhaps also some sort of long term play here concerning the possible future of Taiwan? I am sure someone else understands this better than I do.
Index ETFs, indiscriminate investors, a broad cyclical semi recovery after two years of semi recession, most semi companies can make some AI relevance pitch, and sometimes they are true. ON for example, auto & industrial focused power, network, sensing, but their AI datacenter rev is growing fast because racks take a lot of power.
Also, when a group rally starts to rip, standard practice is to reach down to the smaller, lower quality, more speculative names that didn’t lead the initial move.
Here’s hoping your MSFT bet turns out better
I recently significantly trimmed a stock trading at a forward PE of 57 that I have owned for over a decade, during which time it traded at a forward PE in the range of 20-30.
And then it went higher. Just shoot me! 🙂
As bad as Intel was it was never going out of business. The country needs domestic chip production and that alone makes the company valuable due to it’s strategic importance. Companies broadly are trying to reduce their exposure to China and the potential disruption to supply chains from a potential conflict.
There are other sectors/ companies that will get a boost due to similar dynamics.
INTC is a hedge against China-Taiwan, and a play on US Govt intervening in markets.
But why are we talking about INTC, fast money is moving on to AMD. Didn’t trim this one into report, learned my lesson after the INTC spanking.