Intel, Synopsys, Crowdstrike, Applied Materials, Seagate Lead S&P 500 Weekly Gains - But One Isn't Overbought

Intel Corp. (INTC) stock was on fire last week, extending the momentum it has been witnessing this year, as the struggling chipmaker agreed to receive a $5 billion investment from artificial intelligence (AI) stalwart Nvidia (NVDA).

The stock logged a weekly gain of nearly 23%, marking the best week since the week ended Jan. 31, 1975, according to Dow Jones data.  For the year, the stock is now up 47.53%, outperforming Nvidia stock's 32% gain and the iShares Semiconductor ETF's (SOXX) 24% rise. 

Intel ended with the best weekly gains among S & P 500 stocks last week. By virtue of Intel's year-to-date (YTD) gains, the stock is now positioned in the overbought zone, potentially leaving traders concerned about whether they are late to the party.

The 14-day relative strength indicator (RSI) for the Intel stock is currently at 71.83. A reading above 70 suggests that the stock is in the overbought zone. An overbought stock is one whose price has risen rapidly and is at levels beyond what its underlying fundamentals or intrinsic value suggest. 

That said, the overbought fears may appear overblown if one considers the underperformance over the past five years (down about 8%). 

After struggling for years with product missteps and a business model that wasn't nimble enough to embrace new technologies, Intel, under its new CEO Lip-Bu Tan, began right-sizing operations. The stock started to turn the corner as it factored in the possibility of a reversal in fortunes. The decision by President Donald Trump's administration to take a stake in the company provided a boost to the company and its stock. The Nvidia news served to accelerate the rally's momentum.

That said, Intel's forward price-earnings (P/E) multiple is a hefty 139 times, notably higher than Nvidia's 31 times, according to Koyfin.

The short interest in Intel's stock is 1.5%, according to Koyfin.

The runup has not deterred retail traders on Stocktwits. They continued to have 'extremely bullish' (80/100) sentiment toward the Nvidia stock, and the message volume was at 'extremely high' levels.

Among the other top S & P 500 gainers for the week are:

• Snyopsys (SNPS), a provider of electronic design automation software products used to design and test integrated circuits: +16.46%
• Cybersecurity company CrowdStrike (CRWD): +15.24%
• Chip testing equipment maker Applied Materials (AMAT):  +13.29%
• Data storage solutions company Seagate (STX): +12.88%

The year-to-date performances stack up as follows:

YTD Performance: INTC Vs. SNPS Vs. CRWD Vs. AMAT Vs. STX

Source: Koyfin

All stocks, except Synopsys, are in overbought territory. 

RSI: INTC Vs. SNPS Vs. CRWD Vs. AMAT Vs. STX 

Source: Koyfin

Synopsys came under significant selling pressure earlier this month after the company posted weaker-than-expected quarterly results and issued downbeat guidance.

Baird semiconductor analyst Tristan Gerra views the Nvidia investment as an incremental positive for Intel, potentially enhancing market share gains and driving foundry revenue growth.

The Koyin-compiled consensus analysts' price target for Intel is $24.87, implying roughly 16% downside from Friday's close.

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