To The Moon

Intel Competes With Palantir, AMD in Most Active Options as Shares Tumble

$Intel(INTC)$   is running against $Palantir Technologies Inc.(PLTR)$   and $Advanced Micro Devices(AMD)$   in the race to be Friday's third most active stock option, joining an elite group that's been dominated by $Tesla Motors(TSLA)$   and $NVIDIA Corp(NVDA)$  . 

The race between Nvidia's smaller rivals Intel and AMD is being driven by their diverging fortunes. In the case of Intel, put options volume rose as the stock extended this year's decline to almost 34%, bolstering the case for shareholders to seek protection against a worsening slump. 

The opposite is true AMD which has seen its shares rally about 20% in the past year. The trading volume is rising for call options that give their holders the right to buy the stock at a specified price, as the company's improving prospects boost the investment appeal of instruments tied to semiconductor company that ranks second to Nvidia in the race to dominate the market for powerful chips for artificial intelligence (AI). 

"Intel will continue to burn cash and concede more market share in the PC client and server business to AMD,” JPMorgan analysts Harlan Sur and Peter Peng wrote in a note to clients Friday. 

After the market closed on Thursday, Intel provided a third quarter gross margin outlook that missed analysts' average estimate. That overshadowed the better-than-expected revenue, and instead reminded Wall Street of the challenges that resulted in the company posting its sixth straight quarterly loss for the three months ended June.

Intel shares fell as much as 9.9% to $20.39 Friday, boosting the odds that a number of put options could be in the money before they expire. The heaviest trading in Intel options were in contracts that give their holder the right to sell the stock at $17.50 in 35 days. That's almost $3 cheaper than stock's current price. Volume reached 43,840 contracts, compared with open interest of 111.

Put options volume climbed to 476,540contracts as of 2:10 p.m. on Friday, from yesterday's total of 380,939. The current trading activity was more than quadruple the 20-day average of 107,691 contracts, according to data compiled by Bloomberg. 

For the third quarter ending in September, the company expects adjusted gross margin to reach 36%. That’s lower than the 37.3% expected by analysts, according to the average of estimates compiled by Bloomberg. 

In the second quarter, revenue was almost flat at $12.86 billion. While that's better than the $11.88 billion expected by Wall Street, it likely reflected favorable seasonality and the benefits from customers pulling forward their purchases ahead of the implementation of tariffs, according to Bloomberg Intelligence industry analysts Kunjan Sobhani and Oscar Hernandez Tejada.  

Intel's total options volume reached 1 million including call options. That surpassed yesterday's total of 806,594 contracts and more than triple the 20-day average of 299,564. 

That puts Intel just slightly ahead of AMD's volume of 996,070 options, but behind Palantir's 1.07 million. 

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