Intel shares surge 214%, short sellers face $12B in losses

Intel has been on an absolute tear since March 2023, rallying 214% and adding over $440 billion in market capitalization.

Short sellers have been punished to the tune of $12 billion in mark-to-market losses over just six weeks. And yet, stubbornly, they’re not leaving. Short interest sits near its 52-week high, meaning a significant chunk of the market still thinks this rally is living on borrowed time.

The numbers behind the comeback

Intel recently logged a 25% gain in a single week, its best weekly performance since January 2000. The stock is currently the top performer in the S&P 500 since early April.

The fuel behind the move is twofold: AI optimism and Intel’s evolving foundry business. Intel’s positioning as a potential beneficiary of the AI infrastructure buildout is coupled with a US government stake and a $5 billion investment from NVIDIA.

Short sellers are taking a beating, but won’t tap out

Short interest hovering near its 52-week high tells a clear story: these traders aren’t capitulating.

Among 53 analysts covering Intel, only 17 hold a “Buy” rating. Three rate it a “Sell.” The average target price sits at $85, which implies approximately 34% downside from current levels.

What this means for investors

The fact that Intel is the top-performing S&P 500 stock since early April while simultaneously being one of the less favorable names in the Philadelphia Semiconductor Index, based on analyst ratings, captures the dissonance perfectly.

What to watch: whether short interest starts declining, whether Intel can show tangible foundry revenue progress in upcoming earnings, and whether the broader AI trade continues to lift all semiconductor boats or starts getting more selective.