13% Intel Drop Is a Cautionary Tale to Traders

As Intel stock reminded traders, what may seem bullish on paper doesn’t necessarily translate to the market. Despite beating Wall Street expectations on earnings per share and revenue, the stock dropped by as much as 13% after the market was already closed following the company’s Q4/full-year earnings report on Wednesday (January 22). It’s a cautionary tale for traders to always pay attention to the market reaction, and in this case, the market’s response to weaker guidance.

Intel CFO David Zinser noted that the semiconductor company may not have the requisite supply to meet demand in the first quarter of 2026. Given that the stock is up over 100% within the last 12 months, it sounded the alarms for traders to sell.

“We exceeded Q4 expectations across revenue, gross margin, and EPS even as we navigated industry-wide supply shortages,” Zinsner said. “We expect our available supply to be at its lowest level in Q1 before improving in Q2 and beyond. Demand fundamentals across our core markets remain healthy as the rapid adoption of AI reinforces the importance of the x86 ecosystem as the world’s most widely deployed high-performance compute architecture.”

INTC data by YCharts

A Click Buy Opportunity?

Whenever a stock drops as much as 13%, savvy market players may see this as an opportune time to click “buy” on their trading platforms. With a company like Intel carrying a long history, the assumption is that they’ll be able to weather any storms. Market corrections are par for course and this could just be a pullback that was due given the stock’s strong run the past year. Also, the long-term trend of AI should help provide ample industry tailwinds.

“Our conviction in the essential role of CPUs in the AI era continues to grow,” said Lip-Bu Tan, Intel CEO.

Conversely, it could be the start of a longer downtrend. This is the quandary traders face daily—what will the stock do next? If the stock sloughs this off as a temporary pullback, traders may want to lean into that strong conviction with the Direxion Daily INTC Bull 2X ETF (LINT). The fund is one of the newer offerings in Direxion’s existing single-stock ETF lineup, which are ideal for traders looking to add additional exposure to a company’s stock without the use of a margin account.

“For traders who believe this pullback presents an opportunity to buy back into one of the best performing chip stocks, LINT offers 2X daily exposure to INTC,” said Ryan Lee, Senior Vice President of Product and Strategy at Direxion.

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