Investors punished Intel as $20 billion in planned capital spending raised doubts about profitability amid a broader chip sector sell-off.
Intel (NASDAQ: INTC) stock dropped 35.4% in July, driven by investor concerns over elevated capital expenditures and a sector-wide pullback in semiconductor equities. The decline mirrored broader industry weakness, with 20 major chipmakers losing a combined $1 trillion in market value during the month.
The sell-off reflected skepticism about the sustainability of AI-driven hardware spending, which is projected to reach $750 billion in capex this year. Intel’s pledge to spend over $20 billion in 2024—and significantly more in 2027—further spooked investors, despite progress in its foundry business.
Semiconductor stocks faced pressure as doubts grew over whether AI infrastructure investments would yield sufficient returns. Intel’s aggressive spending plans contrasted with broader market caution, amplifying the stock’s decline.