Intel Stock Drops 2.5% on DeepSeek Sell-Off; Former CEO Says 'Markets Are Getting It Wrong'

There’s widespread weakness in artificial intelligence (AI) stocks today, with the sudden surge of China’s DeepSeek app threatening to disrupt the current AI ecosystem. However, with legacy semiconductor stock Intel (INTC) tumbling 2.5% amid the heavy selling, former CEO Pat Gelsinger said earlier that “The markets are getting it wrong” when it comes to DeepSeek’s impact on the U.S. AI market.

In a post on his X account, Gelsinger explained, “Making it dramatically cheaper will expand the market” for computing and AI, adding “Thank you DeepSeek team.”

While AI chip giant Nvidia (NVDA) continues to trade near its lows of the session, today’s losses are more of the same for underperforming INTC. The stock is down more than 53% over the past year, and a recent rally attempt was turned away by Intel’s overhead 50-day moving average.

Intel is due to report its latest quarterly earnings after the close this Thursday, Jan. 30, and the options market is pricing in a post-event move of 8.19%. Back in January 2024, INTC stock plummeted 11.91% the day after earnings.

Ahead of its fourth-quarter earnings, Intel scored an upgrade from HSBC last week, as the brokerage firm raised its rating from “Hold” to “Reduce” - though with a price target of $20, analysts analysts Frank Lee and Pulkit Aggarwal observe that the stock is “fairly priced” around current levels.

"While we do acknowledge that the worst seems to be over for Intel and all headwinds from the past few months seem to be priced-in, we believe it still remains early to have a clear view on its execution leading to overall recovery of the business," wrote Lee and Aggarwal in a note to clients.

Overall, INTC has a tepid “Hold” rating from the 37 analysts in coverage, with an average price target of $25.74 - a premium of about 27% to current levels.