Intel Plunges 9% as Foundry Cuts Shake Investor Confidence—Is the Semiconductor Giant’s Turnaround Already in Jeopardy?

Summary
• Intel shares dropped 9% after CEO Lip-Bu Tan announced halting foundry projects and cutting 15% of its workforce.
• The stock traded between $20.36 and $21.045, erasing nearly all of its 2025 gains.
• Sector peers like AMD saw modest gains, highlighting Intel’s isolation amid broader chipmaker struggles.

Intel’s sharp sell-off on July 25, 2025, reflects deepening investor skepticism over its foundry business and AI ambitions. With the stock trading near its 52-week low of $17.665, the move underscores the sector’s fragility as geopolitical tensions and AI demand volatility collide. The company’s decision to pause European and Polish projects, coupled with its reliance on a single customer for foundry success, has reignited doubts about its long-term competitiveness.

Foundry Cuts and Uncertain Roadmap Trigger Sharp Sell-Off
Intel’s 9% intraday plunge was driven by its admission that it has failed to secure external foundry customers for its next-generation 14A manufacturing process. CEO Lip-Bu Tan’s memo to employees, coupled with the SEC filing stating the company may abandon its foundry business entirely, triggered panic selling. The move to halt projects in Germany and Poland—part of a $2.9 billion loss quarter—signals a strategic retreat from high-risk bets. Analysts at Barclays and Jefferies noted the lack of “competitive products until next year” and the incremental nature of Tan’s reforms, further eroding confidence in the CEO’s turnaround plan.

Semiconductor Sector Volatile as AI Demand and Geopolitical Tensions Collide—AMD Gains Ground
The broader semiconductor sector remains polarized. While Intel’s struggles deepen, Advanced Micro Devices (AMD) rose 2.55%, capitalizing on its AI chip momentum and stronger customer relationships. Sector news highlights TSMC’s $1.6 billion profit surge and Nvidia’s $5 billion H20 chip sales resumption to China, contrasting Intel’s self-inflicted setbacks. Meanwhile, geopolitical risks—such as Trump-era tariffs and China’s smuggling of $1 billion in U.S. AI chips—add to sector-wide uncertainty, amplifying Intel’s isolation.

Bearish Options and Key Support Levels Define Intel’s High-Risk Trade
• 200-day average: 21.82 (above) • RSI: 51.29 (neutral) • MACD: 0.4175 (bearish crossover) • Bollinger Bands: 21.87–23.98 (oversold) • 30D Support/Resistance: 23.23–23.30 (broken) • 200D Support/Resistance: 20.17–20.35 (critical)

Intel’s technicals point to a short-term bearish bias, with the 200D support at $20.17 now in play. Two options contracts stand out for aggressive bearish positions:

• INTC20250801C21 (Call): Strike price $21, Expiration 2025-08-01, IV 36.66%, Leverage 85.31%, Delta 0.3359, Theta -0.0574, Gamma 0.3282, Turnover $1.12M. This call’s moderate delta and high gamma make it responsive to downward price acceleration, while its 85.31% leverage ratio amplifies potential returns if the stock breaks below $21.
• INTC20250801C20.5 (Call): Strike price $20.5, Expiration 2025-08-01, IV 35.87%, Leverage 47.62%, Delta 0.5078, Theta -0.0753, Gamma 0.3668, Turnover $778K. Its 47.62% leverage and high gamma position it to capitalize on a 5% downside move, with a projected payoff of $0.50 per share if Intel hits $19.50 by expiration.

Aggressive bulls may consider INTC20250801C21.5 into a bounce above $21.50, but the broader case for Intel remains bearish. If $20.17 breaks, cash-secured puts on the 2025-08-08 chain could offer short-side potential.

Backtest Intel Stock Performance
Intel (INTC) has experienced a total of 609 intraday plunges of at least -9% since 2020. Following such events, INTC has shown a generally positive short-to-medium-term performance, with 51.89% of days experiencing a gain within three days, 55.34% within ten days, and 52.87% within thirty days. The maximum return observed was 0.53% on day 14 after the plunge, indicating that while gains are common, they are generally modest.

Intel’s 200D Support at $20.17 Now a Critical Inflection Point—Act Fast
Intel’s 9% plunge has exposed the fragility of its turnaround strategy, with the 200D support at $20.17 now a make-or-break level. A breakdown would validate the bearish case, while a rebound above $21.50 could signal short-term stabilization. Sector leader AMD’s 2.55% gain highlights the contrast in momentum, but Intel’s unique challenges—foundry uncertainty and AI underperformance—demand a cautious approach. Watch for a 30D support test at $23.23 or a 200D support test at $20.17. For now, short-term options like INTC20250801C21 offer the best risk/reward to capitalize on the near-term sell-off.