Nvidia, AMD and Intel stocks slipped in pre-market trading on Tuesday as investors took some money off the table after Monday’s artificial-intelligence rally pushed semiconductor stocks sharply higher.
AMD and Intel were each down about 1.5% in early trading, according to MarketWatch, while Nvidia also eased after gaining 2.3% on Monday.
The pullback follows a 9.9% surge for AMD and a 12.1% jump for Intel, moves that rapidly repriced expectations for stronger processor demand.
Monday’s rally left plenty of room for profit-taking
AMD closed Monday at $615.52, up 9.9%, pushing its market value above $1 trillion for the first time.
Intel jumped 12.1%, Nvidia rose 2.3% to $227.38 and the Philadelphia Semiconductor Index gained more than 4%. The Nasdaq climbed 2.3% to a record close.
The immediate catalyst was renewed enthusiasm around Meta’s Muse AI assistant, which rose to the top of Apple’s US App Store.
Its popularity strengthened the argument that agentic AI could create another wave of demand for computing infrastructure.
That helped explain why AMD and Intel dramatically outperformed Nvidia.
AI agents do not rely only on accelerators. Persistent inference workloads can also increase demand for server CPUs, making the rally broader than a pure GPU trade.
Tuesday’s weakness, however, does not appear tied to a fresh negative semiconductor catalyst. The stocks are surrendering only a fraction of Monday’s gains.
The question is whether one successful application justified adding tens of billions of dollars in market value to chipmakers in one session.
High Treasury yields are making AI valuations harder to chase
Monday’s rally also benefited from a macro tailwind. The 10-year Treasury yield fell to about 4.95%, while oil prices retreated, reducing some of the valuation pressure that had weighed on technology stocks.
That relief remains fragile. The Federal Reserve raised rates last week, and policymakers have left the door open to further tightening if inflation stays persistent.
The 10-year yield remained close to 5% on Tuesday.
Emily Bowersock Hill, chief executive of Bowersock Capital Partners, told Barron’s that rising rates “are a drag on stocks” and that “Treasury yields at this level pose significant competition to equities.”
That matters for Nvidia and AMD because a larger share of their valuations rests on profits expected years into the future.
Higher yields reduce the present value investors assign to those earnings and make expensive growth shares more vulnerable after sudden rallies.
Strong AI fundamentals and demanding valuations can therefore coexist.
The AI demand story has not disappeared overnight
There is still little evidence that Tuesday’s weakness reflects a collapse in AI spending.
Gabelli Funds portfolio manager Hendi Susanto told MarketWatch last week that customers continue signing multiyear contracts for chips, networking equipment and other AI hardware.
“That’s not what the front end of a downturn looks like,” Susanto said, arguing that inference, enterprise AI and physical AI could keep infrastructure demand elevated while semiconductor capacity takes years to expand.
Intel also has a company-specific case. Melius Research analyst Ben Reitzes wrote that the AI “puck” has skated towards Intel’s foundry business “in addition to CPUs in general.”
Melius maintains a $165 two-year target and has said even $200 could be possible in a more bullish scenario.
For Nvidia and AMD, the broader support remains enormous hyperscaler spending on AI infrastructure.
Tuesday’s pullback therefore looks less like Wall Street abandoning the AI trade than testing how quickly investors should price in its next leg higher.
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