The stock has surged 214% since March 30, adding over $440 billion in market value in just six weeks. That kind of move is rare even in a full-blown bull market. What makes it more fascinating is that short sellers are still piling in.
According to S3 Partners, traders betting against Intel are now sitting on more than $12 billion in paper losses. Yet short interest remains near a 52-week high.
That tells you something important:
A large part of Wall Street still does not believe this rally is sustainable.
And honestly, you can understand why.
Intel is now trading at roughly 100x forward earnings, making it one of the most expensive semiconductor stocks in the S&P 500. For comparison, Nvidia trades closer to 24x forward earnings. On traditional valuation metrics, Intel looks stretched.
But momentum markets rarely care about traditional valuation in the short term.
The current rally is being driven by a combination of:
- AI optimism
- Government backing
- Strategic partnerships
- Explosive earnings expectation upgrades
- Massive momentum chasing
The recent trigger was reports of a preliminary chip manufacturing agreement with Apple. That added fuel to an already overheated move.
At the same time:
- Nvidia invested $5 billion into Intel last year
- Intel’s new Xeon chips are now being used in Nvidia systems
- Management recently issued a sales forecast far above Wall Street expectations
- Analysts have more than doubled 2026 EPS estimates in just one month
This is no longer just a “turnaround” story.
The market is now pricing Intel as a central AI infrastructure player.
And that changes everything.
What’s interesting is how divided the market still is.
Despite the stock making new highs almost daily, analyst sentiment remains surprisingly cautious. Bloomberg data shows the average analyst price target still implies a 34% downside from recent levels.
Only 17 of 53 analysts covering the stock currently rate it a buy.
That disconnect matters.
Because some of the biggest rallies in history happen when:
- fundamentals improve,
- momentum accelerates,
- and institutional skepticism remains high.
That creates constant pressure on short sellers and under-positioned funds to chase the move higher.
You can already see that happening across semiconductors broadly.
Since early April:
- The Philadelphia Semiconductor Index is up 55%
- AMD and Micron have also seen rising short interest
- RSI levels across the sector are approaching extremes not seen since 2011
Translation:
This market is getting crowded and overheated.
But overheating alone does not stop momentum.
That’s the dangerous part for short sellers.
Trying to “call the top” in AI names has become one of the most painful trades of 2026. Every dip gets bought. Every valuation concern gets ignored. Every bearish call becomes fuel for another squeeze.
One portfolio manager quoted in the piece said something important:
“Companies view AI as existential, so they’re not going to stop investing in it.”
That may be the single biggest force driving this cycle.
Whether valuations make sense today almost becomes secondary when every major company believes it must spend aggressively on AI infrastructure just to stay competitive.
That creates enormous demand for:
- chips
- compute
- memory
- networking
- manufacturing capacity
And markets are rewarding almost every company connected to that chain.
Still, risks are clearly rising.
Parabolic rallies rarely move in straight lines forever. Even bullish investors acknowledge that stocks like Intel could eventually see brutal 20% to 30% corrections along the way.
The key question now is:
Is Intel experiencing a temporary momentum bubble, or is the market correctly repricing it as a long-term AI infrastructure winner?
Right now, momentum traders are clearly betting on the second outcome.
And short sellers trying to fight that trend are getting steamrolled.