Semiconductor stocks are rebounding in Tuesday trading, suggesting the recent sell-off reflected short-term hedge-fund positioning rather than a fundamental breakdown in the AI trade, according to Coin Bureau founder and cross-asset analyst Nic Puckrin.

Intel Corp (NASDAQ:INTC) and Micron Technology (NASDAQ:MU) are leading gains on both price and trading volume, with Marvell Technology (NASDAQ:MRVL) also among the biggest movers, while AMD (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) are higher as well, albeit with less dramatic moves.

Pukrin said hedge funds likely trimmed long semiconductor exposure after momentum long/short strategies that worked well in June became less effective in July as the gap between semiconductors and AI hyperscalers narrowed.

Intel‘s Stock Faces July Reversal

Despite the current rebound, Intel has experienced a significant reversal in July, shedding 28% of its value after a strong first-half rally.

This downturn is part of a broader trend affecting top-performing stocks from the first half of the year, many of which have seen sharp declines.

The AI infrastructure trade, which fueled Intel’s earlier gains, is now facing a pullback, reflecting a textbook case of mean reversion in the market.

Intel’s Strategic Layoffs and Earnings Outlook

As Intel prepares to report its second-quarter earnings, the company has announced another round of layoffs in its Data Center and AI Group. This move is part of a broader strategy to streamline operations and position the business for long-term growth.

The layoffs come despite strong growth in Intel’s data center business, which saw a 22% revenue increase in the first quarter.

Investors are keenly watching to see if Intel’s turnaround story is gaining traction, with expectations for adjusted earnings of 22 cents per share on revenue of $14.45 billion. The company’s restructuring efforts, led by CEO Lip-Bu Tan, aim to create a more focused and efficient organization, a move that could signal the final stages of a broader transformation.

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