By Doug Busch

Semiconductor stocks have hit a wall -- but shares of Intel may be getting ready to run after President Donald Trump announced that the U.S. had taken a 10% stake in the struggling chipmaker.

In a market that surged to close the week, not all sectors joined the celebration. The semiconductor space, tracked by the VanEck Semiconductor exchange-traded fund, actually fell 0.7% for the week.

The VanEck Semiconductor ETF now sits roughly 3% below its recent 52-week high, about half the drawdown seen in software, as measured by the iShares Expanded Tech-Software Sector ETF. Technically, it remains well above its weekly double bottom breakout of $269.76, but it's showing signs of fatigue near the very round $300 level.

Adding to the cautionary tone is the appearance of rare doji candles, one during the week ending Jan. 24 -- highlighted within a rectangle -- and another just two weeks ago. In January, the doji candle preceded a sharp 100-point pullback into April, serving as a reminder that doji formations often signal potential trend reversals or pauses.

While another steep decline isn't the base case, a retest of the $275-2$80 zone, which would retest the double bottom breakout, seems plausible.

The VanEck Semiconductor ETF closed Friday at $293.64.

Intel, long considered dead money and far removed from its days as a dominant force in semis has found itself back in the spotlight recently with some government involvement. It's now just the 13th largest holding in the VanEck Semiconductor ETF, at less than 4% of the fund.

Looking at the weekly chart dating back to 2020, the technical weight is clear. Round number resistance at $50 marked a key turning point in late December 2023, setting up a classic bear flag pattern that broke down with a pivot near $30.

Then came the crushing week ending Aug. 2, 2024, where Intel plunged 32% following a dismal earnings report and the suspension of its longstanding dividend.

Since that breakdown, shares have been trapped in a tight range between $20 and $25, unable to reclaim any real momentum. This kind of sideways churn is often a sign of bearish digestion, a pause before continuing lower.

While the dominant trend remains negative, it's worth noting that a break above $25 could trigger a swift short-covering rally back toward $30 into year-end. That said, until such a move materializes, the path of least for Intel, which closed Friday at $24.80, remains lower.

One argument bulls might make is found in the monthly chart, going back to Intel's 1971 IPO. Since 2001, the stock has mostly traded sideways, earning its "dead money" moniker. Support near $20 has historically drawn buyers, but I'd prefer to see strength above $26 before considering a long position.

Troublingly, Intel hasn't posted consecutive monthly gains since the start of 2024, despite sector strength. Its growing ties with the U.S. government may bring capital, but also uncertainty and bureaucracy. For now, Intel remains more a hope trade than a leadership name.

Analog Devices, which just this week notched a fresh all-time high, may be a better bet.

Unlike some of the flashier names in the chip space, ADI has climbed at a measured pace, up 18% year to date and 13% over the past 12 months.

The weekly chart dating back to the Covid era shows steady, constructive progress. Notably, round number resistance at $200 acted as a ceiling in both 2023 and early 2024, before this week's decisive breakout above a double bottom trigger at $247.20. Analog Devices closed Friday at $252.20.

Even more impressive was Analog Devices's relative strength this week, gaining nearly 9% while the VanEck Semiconductor ETF was essentially flat. That kind of outperformance by the stock, especially at a new high, signals genuine institutional interest. Stay bullish above $235.

Even at a new high, that seems like a better bet than Intel.

Write to Doug Busch at douglas.busch@barrons.com

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August 25, 2025 03:00 ET (07:00 GMT)

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