Left for Dead, Intel Roars Back to Drive Market Higher

For many years, Intel (INTC) was one of the most consequential stocks in the market. It was the clear leader in the semiconductor industry and was often viewed as a bellwether. Its earnings report often triggered new market trends.

The CHIPS Act Rescue

Following a post-COVID bounce, Intel lost its crown to Nvidia (NVDA) , which has outperformed it manyfold over the past five years. Many investors thought Intel would be lucky to survive, but the CHIPS and Science Act of 2022 provided a lifeline. The law was designed to promote semiconductor manufacturing in the U.S., and in early 2024 Intel received $8.5 billion in direct grants and $11 billion in low-interest loans. Intel continued to struggle, but in August 2025 the U.S. government took a 433 million share stake, roughly 10% of the equity.

A new CEO, Lip-Bu Tan, took over and focused the company's resources on domestic fabs in Ohio and Arizona. The timing was perfect as the industry focus shifted toward AI inference, which means running AI models, where Intel CPUs have seen a massive resurgence in demand alongside Nvidia GPUs. Intel is not the leader it once was, but it no longer can be ignored like it has been in recent years.

The Froth Question

The issue now is whether the blow-out report from Intel signals that demand for its chips will continue, or whether we are starting to see frothy action in a group that has run hard. The chip action looks bubbly. Is it a warning sign of excess?

We will have an answer next week when five of the Magnificent Seven (MAGS) report earnings. The focus will be on infrastructure spending, especially chips, but there will also be discussion of initiatives like Alphabet's (GOOGL) efforts to develop its own chips.

Under the Surface

Semiconductors are getting all the attention on Friday, but if we step back and look at the broader market, concerns about bubbles and parabolic moves are not as acute. Although some technology stocks are flying and grossly extended, there are only about 220 stocks at new 12-month highs. That is surprisingly low for a market where major indices are hitting new all-time highs and the chip sector is in a frenzy.

The chip sector was the primary market catalyst on Friday. There is also continued optimism about positive outcomes in Iran, and it now looks likely that Kevin Warsh will be approved as the next Federal Reserve chair after the Department of Justice dropped its investigation tied to the Fed headquarters renovation.

The Magnificent Seven earnings reports next week are set to be a major market catalyst, but as I have been writing about regularly, this is a market for stock picking. There are many good charts out there that are not wildly extended. Don't let the indices or one hot sector distract you from the opportunities under the surface.

Have a great weekend. I'll see you on Monday.

At the time of publication, DePorre was long GOOGL.