Intel leads the list of most overbought stocks after this week’s comeback rally
Intel emerged as one of the most overbought stocks this week after the chip giant entered new partnerships with Google and Elon Musk ‘s Terafab project. The major averages rose this week on hopes that the fragile ceasefire between the U.S. and Iran could be maintained. The tech-heavy Nasdaq Composite led the gains, rising 4.7%, while the S & P 500 and Dow Jones Industrial Average followed with increases of 3.6% and 3%, respectively. But investors piled into certain stocks more than others. CNBC Pro used its stock-screener tool to identify these names based on their 14-day relative strength index, or RSI. Stocks with a 14-day RSI above 70 are considered overbought, meaning that a pullback could be on the horizon. On the other hand, a reading below 30 indicates that a stock is oversold and may soon be due for a potential rebound. The table below lists this week’s most overbought stocks: Intel stock had surged nearly 25% on the week, as of Friday midday, ending up with an RSI of 75. Investors showed the stock love on signs that the chipmaker may be starting to shed its old guard reputation. In an expansion of an existing partnership , Google announced that it has committed to using multiple generations of Intel’s central processing units in its artificial intelligence data centers. “Their Xeon roadmap gives us confidence that we can continue to meet the growing performance and efficiency demands of our workloads,” Amin Vahdat, Google’s chief technologist for AI infrastructure, said in a Thursday statement. Meanwhile, Intel CEO Lip-Bu Tan posted on LinkedIn this week that Intel was helping design, fabricate and package custom chips for SpaceX, xAI and Tesla at Elon Musk’s new Terafab project, a Texas-based chip factory. Fellow semiconductor manufacturer Broadcom joined Intel on the most overbought list, with an RSI of 71. Shares of Broadcom had added 19% on the week, as of Friday midday, after similarly agreeing to expanded chip deals with Google and Anthropic. Broadcom expects to produce future versions of Google’s AI chips, and has expanded its Anthropic deal to provide the AI startup access to around 3.5 gigawatts worth of computing capacity drawing on Google’s AI processors. Chip stocks have surged this week as investors snapped up semiconductor names in lieu of software, with the VanEck Semiconductor ETF (SMH) closing the week with an 11% gain. On the other hand, this week’s most oversold stocks included a slew of software names. ServiceNow made the list, with an RSI of 26. The software company was trading 19% lower on the week as of Friday midday. On Thursday, UBS downgraded ServiceNow’s rating to neutral from buy, saying that it sees further downside ahead thanks to AI disruption threats. “To date, our view has been that ServiceNow is better-positioned for this AI era relative to other application software firms … [but] given that our confidence in that view has weakened and we’re hearing more anecdotes of non-AI apps software budget pressure, we’re moving to a Neutral rating,” UBS analyst Karl Keirstead wrote. Fellow software stock Salesforce was also on the list, with a week-to-date decline of 11%, as of Friday midday, and RSI of 29. Investors appeared to leave software stocks in the dumps this week, with the iShares Expanded Tech-Software Sector ETF (IGV) closing the week 7% lower. — CNBC’s Jordan Novet and Katie Tarasov contributed to this report.
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