Intel Attracts Biggest Short Volume as Bears Clash With Bulls

$Intel(INTC)$   attracted the biggest short volume, highlighting bears' persistent skepticism over the ability of the legacy chipmaker to catch up to its biggest peers in the race to meet demand for advanced AI chips. 

Trading in borrowed Intel shares that were sold short jumped 27% to 24.1 million shares Thursday, the biggest among stocks with a market capital of more than $5 billion tracked. Short sellers raised their stakes in Intel even as the stock jumped more than 9% that day. 

Bears piled in, signaling doubts over the positive arguments cited by bulls. Yesterday, Bank of America Vivek Argya double-upgraded the stock to a buy from a sell. Earlier this week, The Information reported that $Alphabet(GOOGL)$  's Google placed an order for Intel to manufacture more than 3 million tensor processing units (TPUs) in 2028. 

Other companies, including $NVIDIA(NVDA)$   are reportedly considering Intel as a backup manufacturer for their advanced chips, although Nvidia hasn't placed an order yet, according to the report. 

Short sellers are betting the stock's more than 200% climb this year may reverse, giving them the opportunity to buy back the shares they borrowed at a lower price. After that surge, the stock is now trading at 105 estimated full year earnings, much pricier than the 22.8X for Nvidia, which is the dominant player in AI chips.

With profit ratio above 81% and resistance at $121, volatility may rise if holders decide to sell into strength while short sellers add pressure.

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