Intel Stock Dips Premarket After Nvidia-Powered Rally As Citi Slaps 'Sell' Rating

The investment research firm stated that the deal is unlikely to benefit Intel's struggling foundry business.

Intel shares slipped 2.5% in early premarket trading on Friday, after City downgraded the stock to 'Sell' from 'Neutral' following its recent rally.

The previous day, Intel shares rose 22.8% on news that Nvidia will invest $5 billion for a roughly 4% stake in the struggling chip company and jointly develop PC and data center chips. Nvidia shares, too, slipped marginally in Friday's premarket session.

According to a summary of the investor note on The Fly, Citi analysts argued that investors expect the deal to supercharge Intel's chip manufacturing or foundry business, which it sees as unlikely. The investment research firm, however, raised its price target on Intel's shares to $29 from $24.

Reuters reported on Thursday that the new chips planned to be jointly developed will not be produced by Intel's foundry, but the unit will supply central processors and advanced packaging for those products.

Nvidia CEO Jensen Huang reportedly said Nvidia will continue to evaluate Intel's foundry technology and has been working with the rival for nearly a year.

On Stocktwits, the retail sentiment for INTC stayed in the 'bullish' zone, unchanged overnight.

Meanwhile, President Donald Trump sparked some buzz among Intel investors after posting an AI-generated image showing him at the Oval Office desk, surrounded by monitors displaying trading charts, with text on the image reading "Bought Intel at $20" and "Intel now at $30."

The picture lacked a caption, leaving people to speculate whether it was about an undisclosed future plan or Trump taking credit for helping Intel and its stock.

As of last close, Intel's shares are up over 52% year-to-date.

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