Intel Shares Drop 35.4% Amid Semiconductor Industry Sell-Off

Intel shares declined 35.4% in July 2026, coinciding with a broad semiconductor industry sell-off that saw the 20 largest chipmakers lose a cumulative $1 trillion in market value. The downturn reflects growing investor skepticism regarding the sustainability of spending on artificial intelligence hardware.

The company has committed to more than $20 billion in capital expenditures this year, with projections for significantly higher spending in 2027 to expand manufacturing capacity and the 18A process. These high costs have fueled caution among investors, who question whether Intel can attract a sufficient number of large customers to justify its investment levels.

Despite the stock drop, the company reported a 31% increase in second-quarter foundry sales, totaling $5.8 billion. However, Intel maintains a price-to-earnings ratio of 88, which remains significantly higher than the tech sector average of 34.