Why Intel Stock Is Sinking Today

Intel (INTC -1.87%) the stock drops again on Wednesday. The chip company’s share price was down 2.4% at 2:40 p.m. ET, according to data from S&P Global Market Intelligence. Meanwhile, Nvidia the stock fell 2.8%.

While there’s no business-specific news pushing Intel shares lower today, the company’s share price is falling with the moves for Nvidia. The artificial intelligence (AI) leader is scheduled to report second-quarter results after the market closes today, and investors are feeling nervous ahead of the release.

What Will Nvidia’s Q2 Report Mean for Intel Stock?

Nvidia’s stock has been highly influential in shaping semiconductor stock valuations and the broader market this year. The company’s results will be used as a barometer to measure overall demand in the AI ​​space and could cause a significant move for Intel’s valuation.

Expectations are high for Nvidia’s T2 report. The average analyst estimate calls for Nvidia to post sales of $28.7 billion — suggesting 112.4% year-over-year growth. The mid-Wall Street target is also calling for non-GAAP (adjusted) earnings per share of $0.65 — up 141% from the diluted adjusted earnings of $0.27 per share it posted last quarter.

Even if Nvidia ends up delivering Q2 sales and revenue that beat Wall Street expectations, Intel and other AI stocks could face valuation volatility. If early guidance misses expectations or the company announces a longer-than-expected delay for its next-generation Blackwell processors, semiconductor stocks could be hit by an increase in bearish sentiment.

Is Intel stock a buy?

With today’s selloff, Intel stock is once again trading just a hair above the 10-year low it hit earlier this month. The company’s share price is now down 61% year-to-date and down 71% from its 10-year high.

INTC data by YCharts

For risk-tolerant investors who see promise in the company’s efforts to compete with Nvidia and other AI leaders and dramatically expand its chipmaking business, Intel’s big pullback could be a worthwhile buying opportunity. But investors should approach Intel stock with the understanding that the company is still in the early stages of complicated restructuring and turnaround initiatives, and the dramatic declines in the stock price reflect uncertainty about whether the business can succeed with its turnaround plans.