These Are the Most Overbought Stocks Due to a Decline. Number One on the List is Intel

The semiconductor giant jumped roughly 21% this week following a Wall Street Journal report that Intel had approached both Apple and Taiwan Semiconductor Manufacturing Company about potential investments.

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The same report also noted that the U.S. government is preparing to push chipmakers to align domestic semiconductor production more closely with import levels.

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That boost has now propelled Intel shares nearly 80% higher for the year. The catch? The rally has left the stock looking stretched.

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Intel’s relative strength index (RSI) has climbed to 80, up from 77 last week. In technical terms, an RSI reading above 70 often signals that a stock may have advanced too quickly and is vulnerable to a near-term pullback.

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“The company’s run from $20 to $35 over the past month has clearly been driven by headline-worthy developments. While we believe CEO Lip-Bu Tan is working on more than just quick wins, one can’t help but wonder whether Intel is being reshaped into a quasi-public company designed to serve its newest backers,” said Don Bilson, who heads event-driven research at Gordon Haskett.

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“Even if Intel is now catering to its investors, that still seems preferable to the situation a couple of months ago, when the stock looked directionless at $20 a share.”

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There’s precedent for caution here. The last time Intel’s RSI hit 80 was on February 19. Within weeks, the stock shed more than 23%, bottoming by March 11.

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Intel isn’t the only name flashing overbought signals. Several S&P 500 companies also crossed the RSI threshold of 70 this week, each logging gains of at least 5% during the same period.

Most Overbought Stocks in the S&P 500

Among them, Marathon Petroleum stands out with the highest RSI reading at 90. Its stock gained more than 7% this week, making it the most technically overbought name in the S&P 500.

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IBM also appeared on the list, with an RSI nearing 79 and a weekly gain of over 7%. Much of the enthusiasm has centered around IBM’s progress in quantum computing. HSBC recently revealed it had tapped IBM’s Heron quantum processor to enhance bond trading strategies.

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“We see IBM as a clear leader in quantum technology,” wrote Morgan Stanley analyst Erik Woodring on Friday. “Our research indicates that IBM operates the largest and most advanced ecosystem of quantum computers globally, with more than 75 systems installed since 2017. That’s four more than all other quantum vendors combined.”

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Despite those advancements, Woodring maintained only an equal-weight rating on IBM shares, suggesting that while excitement is justified, investors may want to temper expectations.

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