Intel Stock Is Soaring. Analysts Don’t Know Why.

Intel shares climbed Tuesday. An Intel Xeon 6 processor. (Annabelle Chih/Bloomberg)

Intel stock jumped Tuesday, and it’s hard to figure out why.

Shares of the chip maker added 7.2% to $23.59, while the S&P 500 and Dow Jones Industrial Average dropped 0.1% and 0.4%, respectively.

A move like that could be tied to a Wall Street upgrade or statement from the company, but there aren’t any.

Citi analyst Christopher Danely raised his price target to $24 from $21, but that was Monday. What’s more, he kept his Hold rating on shares.

“Nothing new or fundamental,” says Mizuho managing director and technology specialist Jordan Klein, adding there has been a rotation into semis, which could give Intel a boost considering its starting point.

Intel isn’t a well-loved stock right now. Only 6% of analysts covering the stock rate shares Buy. The average Buy-rating ratio for semiconductor stocks in the Russell 3000 is about 63%.

As for the rotation, through trading on Tuesday, semiconductor stocks in the Russell returned roughly 10% over the past month, leaving them off about 23% over the past 12 months. Intel shares were up about 15% over the past month, leaving them down 31% over the past 12 months.

Intel stock played a little catch-up. Shares also dropped about 4% in the days following a July 2 Reuters report about manufacturing strategy. Investors feared it could lead to a write-off. The fears, however, might have been overblown.

Short covering could also be responsible for some of the rally. Bearish investors will borrow stocks they down one and sell them “short,” betting prices will be lower in the future. They hope to buy them back at the lower price, return the shares, and pocket the difference.

The short interest, which is roughly the amount of shares sold short divided by the shares available to trade, in Russell semiconductor stocks averages about 7%, according to Bloomberg. That’s high. The average short interest in the S&P 500 is about 3%.

The short interest in Intel is about 3%, not alarming, but still, it’s a relatively popular short. Intel is worth more than $100 billion. With larger companies, the short interest isn’t the only factor to consider. Short sellers have sold stock worth some $3 billion in Intel, one of the largest amounts among semi stocks.

Nvidia’s amount of stock sold short is the largest in the group, at about $30 billion, but with its nearly $4 trillion market value, the short interest is less than 1%. Given the short interest and the amount shorted, Nvidia can’t likely be called a popular short. Still, anyone looking to hedge tech positions or play a semiconductor trade may end up hedging with the AI chip giant.

Short selling math aside, covering bearish bets can always give rallies a little extra boost. That is one reason Intel stock might be having a great Tuesday.

As for what exactly set the rally off, investors will have to keep looking.

Write to Al Root at allen.root@dowjones.com