By Adam Clark and Anita Hamilton
After an unsettling drop Tuesday, Intel and other semiconductor companies were rising only modestly on Wednesday. A hot wholesale inflation reading looked to be the latest thing taking the momentum out of the chip-stock rally.
Intel shares were up 1.1% Wednesday afternoon, while Advanced Micro Devices rose just 0.6%. Both companies have soared in recent months amid excitement over the use of their central-processing units in artificial-intelligence hardware.
Qualcomm, which suffered the steepest losses of the bunch yesterday of 11.5%, was seeing the biggest gains Wednesday of 2.1%. The chip company's shares recently hit new highs as investors assess its pivot into data-center processors amid a weak smartphone market.
All three companies had been rising in the premarket but gave up their gains as investors appeared to take fright at the highest 12-month wholesale inflation pace since December 2022, as prices charged by producers rose by 1.4% in April from the month before.
Investors watch PPI inflation closely because its readings feed into the Federal Reserve's preferred inflation metric, the price index of personal-consumption expenditures. Higher inflation means less chance the Fed will cut rates, which could pressure spending on AI infrastructure and therefore chip purchases.
However, some on Wall Street reckon the AI trade will resume sooner or later.
"We maintain our conviction in the long-term upside in the AI investment theme, with global tech companies recently reporting strong AI demand, accelerating cloud growth, and higher capex," wrote Mark Haefele, chief investment officer at UBS Global Wealth Management in a research note.
Write to Adam Clark at adam.clark@barrons.com and Anita Hamilton at anita.hamilton@barrons.com
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(END) Dow Jones Newswires
May 13, 2026 14:51 ET (18:51 GMT)
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