INTC: Intel Stock Falls After HSBC Flags Risks Behind Massive Stock Run-Up

Oct. 8 Intel INTC shares fell about 2% in Wednesday morning trading after HSBC cut its rating on the chipmaker, arguing that the recent surge in valuation may not be sustainable.

Analyst Frank Lee lowered Intel's rating to Reduce from Hold, saying several high-profile investments have pushed the stock up roughly 55% since August. These include funding deals involving SoftBank's $2 billion investment, an $11.1 billion equity purchase by the U.S. government for a 9.9% stake, and Nvidia's NVDA $5 billion investment for around 4% ownership.

Lee said the gains appear driven more by sentiment than by progress in Intel's foundry operations, which he described as still facing execution challenges. He added that while more partnerships could provide a short-term lift, the company's manufacturing turnaround remains uncertain.

HSBC raised its price target to $24 from $21.25 but cautioned that a deeper strategic tie-up with Taiwan Semiconductor TSM, seen as a potential catalyst, appears unlikely. Lee noted that TSM is already committing more than $100 billion toward U.S. chip fabrication projects, reducing the incentive to collaborate.

Intel's foundry unit continues to weigh on results as the company reassesses its next-generation 14A node and shifts focus away from external customers.