Intel shares drop more than 4% after recording $11 billion GAAP net loss tied to CHIPS Act charges

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Intel slides 4.39% to $88.37 today

Highlights

Intel's Q2 revenue surged 25% year-over-year to $16.1 billion, fueled by strong AI server chip demand and data center growth.
Despite positive operating income, Intel posted an $11 billion GAAP net loss due to a $12.5 billion CHIPS Act mark-to-market charge, raising concerns about rising capex and foundry losses.
Shares remain under selling pressure with negative momentum signals, trading in a likely $80.81 to $95.93 range and 67% probability of further downside.

AI-driven revenue surge offset by loss charges and heavy selling

Intel posted $16.1 billion in second quarter sales, a 25% year-over-year increase driven by strong demand for AI server chips and growth in its data center and AI segment. The company reported operating income of $1.796 billion, but a GAAP net loss of $11 billion was recorded due to a $12.5 billion mark-to-market charge tied to the CHIPS Act agreement. Free cash flow turned positive excluding a one-time payment, with high volatility noted following earnings and concerns about increased capital expenditures and foundry investment losses, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, highlights heavy selling pressure on Intel despite record revenue numbers. He notes that technical signals show persistent weakness, with prices far below both 20- and 50-day averages. Negative momentum dominates, and oversold indicators reflect a lack of buyers. The company’s large net loss tied to the CHIPS Act charge and concerns about capital expenditures add to the bearish sentiment. "Given these headwinds, I see limited upside and expect volatility to persist on the downside," Kharitonov states.

Viktoras Karapetjanc, expert at Traders Union, sees Intel’s strong sales and AI momentum as evidence of long-term opportunity. He emphasizes positive free cash flow and the company's leadership in data center technology. In his view, current volatility is temporary and does not undermine the bullish structure. Karapetjanc believes the CHIPS Act loss is largely non-cash and a function of future investment. "With robust fundamentals and expanding AI demand, I expect further growth in the coming quarters," he says.

Short-term selling dominates as technical signals flag oversold momentum

Intel is trading at $88.37, well below its 20-day ($110.72) and 50-day ($115.19) moving averages, but above the 200-day ($65.74) moving average. This setup indicates ongoing short- and medium-term selling pressure, while longer-term bullish confirmation remains. Immediate resistance is at $90.1, with support at $80.81. Momentum indicators are negative: the MACD is in sell territory and the ADX points to a weak trend. RSI, Stochastic RSI, CCI, and BBP all show oversold conditions and BBP at -5.7 confirms sellers dominate intraday momentum. The Awesome Oscillator does not reinforce a clear trend. The stock is down $4.055 or 4.39% in a session marked by a $0.49 downside gap and intraday volatility of 2.15%, trading near session lows in a narrow range. Intraday readings reflect sustained pressure consistent with negative and oversold momentum.

Earlier, analysts noted that Intel faced persistent downside pressure but retained the potential for a rebound, with sentiment closely tied to its innovation efforts and partnerships. The current article strengthens this view, highlighting that despite impressive revenue growth driven by AI, the stock remains vulnerable to further declines unless it can break above immediate resistance at $90.10.

Source of Data: INTC Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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