Intel Needs a Rebound in Chip Demand to Sustain Rally

After climbing to an 8-month high earlier this month, shares of Intel (INTC) have steadily declined, dropping -13% from that high as earnings results from peers Samsung Electronics and Micron Technology (MU) signaled that consumer demand remains weak.  The markets will look to Intel’s quarterly earnings results after the close today to confirm if the worst is over.

Weakness in consumer demand and high chip inventories knocked Intel down to a 6-month low in February.  Still, the stock recovered to an 8-month high earlier this month on optimism that consumer demand would pick up later this year.  According to the International Data Corporation, global personal computer (PC) shipments in Q1 slumped -29% y/y to 56.9 million, taking them to the levels of 2019 before the pandemic.