Intel drops over 30% in July as CNBC club keeps positive view

Stocks declined Friday as renewed concern over artificial intelligence spending pressured technology shares and extended a weeklong retreat in semiconductor names, according to the CNBC Investing Club with Jim Cramer. The VanEck Semiconductor ETF briefly fell 20% from its latest high, a threshold commonly described as bear-market territory, before recovering part of the drop as buyers returned, the Club said.

Portfolio director Jeff Marks attributed the move to selling pressure and profit-taking rather than a change in the underlying investment case for AI, according to the Club’s morning meeting recap. Such reversals can accelerate when shares that have risen sharply face redemptions, risk-limit cuts or investors locking in gains, forcing selling even where analysts or portfolio managers have not changed their view of demand.

The Club said recent portfolio actions had helped cushion the effect of the chip-sector pullback. Marks pointed to a recent reduction in Corning and an exit from Arm as moves that limited exposure and left the portfolio with cash that could be used if new opportunities appear, according to CNBC.

Intel earnings in focus

Intel is scheduled to report earnings next week, and the CNBC Investing Club said it would focus on the strength of the company’s central processing unit business and further progress in its foundry operations. Intel shares have fallen more than 30% this month as investors moved away from semiconductor stocks, the Club said.

Cramer, whose charitable trust holds Intel, has repeatedly described the company as his favorite stock, according to CNBC. He said he was still looking to buy small amounts at current levels, the Club reported. The comments reflect the Club’s stated view and should be read alongside its disclosure that no outcome or profit is guaranteed.

Intel’s foundry business is central to the company’s effort to manufacture chips for outside customers as well as for its own product lines. That model requires heavy capital investment in fabrication capacity and process technology, and investors often assess progress through customer wins, margin trends and execution milestones disclosed by the company.

Apple retakes market-value lead

Apple also drew attention Friday after briefly moving ahead of Nvidia to regain the title of the world’s most valuable company, according to CNBC. The shares rose after HSBC upgraded Apple to buy and lifted its price target to $366 from $260.

HSBC said Apple’s revamped Apple Intelligence platform, additional AI features and expected product launches could support a major device upgrade cycle, according to the Club. The firm also said Apple can benefit from AI without taking on the same level of capital spending that has weighed on large cloud-computing companies, helped by its partnership with Alphabet.

Marks also cited approval for Apple Intelligence on devices in China as a catalyst, saying broader access to the features could encourage customers to move to newer iPhones, according to CNBC. He said he remained positive on Apple over the longer term, while also saying HSBC’s call came after a sharp two-week advance that carried the stock to a record high Friday.

The Club said other stocks discussed in its rapid-fire segment included Capital One, GE Vernova, Honeywell and Alphabet. Cramer’s charitable trust is long Apple, Arm, Corning, Intel, Nvidia and Q, according to CNBC’s disclosure.

This story draws on original reporting from CNBC.