Shares of Intel, Advanced Micro Devices AMD and Broadcom fell sharply on Friday as investors reassessed semiconductor demand following a dismal forecast from Intel.
The retreat was led by Intel after the chipmaker issued a weaker-than-expected forecast, while Amazon’s latest results added to concerns over the cost of building AI infrastructure.
At 11:30 AM EST, Intel shares plunged as much as 28%, putting the stock on track for its worst one-day decline on record. The selloff erased more than $120 billion from its market value.
AMD fell roughly 9.5%, while Broadcom declined around 5%. The Philadelphia Semiconductor Index dropped 6.65%.
Intel’s outlook disappoints investors
Intel’s third-quarter results beat expectations on adjusted earnings, but its forecast for the current quarter fell well short of Wall Street estimates.
Revenue rose 21% from a year earlier to $16.5 billion, matching forecasts. Adjusted earnings came in at 52 cents per share, above the consensus estimate of about 40 cents.
The outlook overshadowed that performance.
Intel expects fourth-quarter revenue of $15 billion to $16 billion, compared with analysts’ estimate of around $17 billion. It forecast adjusted earnings of 25 cents per share, against expectations of roughly 43 cents.
The company also warned that gross margins would come under pressure.
A key weakness is the personal computer market, which remains a significant source of Intel’s revenue.
The company expects PC-related sales to fall by more than 20% sequentially in the current quarter.
Management pointed to a memory-chip shortage, as strong demand from AI data centres tightens supplies and raises component costs.
Higher costs and limited availability are weighing on consumer and business PC purchases. Intel expects the pressure to persist at least through the first half of 2027.
The forecast prompted analysts to lower expectations and renew questions about Intel’s competitive position.
BofA Securities downgraded the stock to Neutral from Buy and cut its price target to $100 from $145, saying Intel had yet to show enough progress in attracting outside foundry customers.
Roth Capital analyst Suji Desilva also moved to Neutral from Buy and reduced his price target to $70 from $120.
Morgan Stanley analysts led by Joseph Moore said the shares remained unattractive despite the steep decline, citing the risk that Intel could lose market share to fabless rivals with lower capital spending needs.
AMD and Broadcom caught in the selloff
AMD fell alongside Intel as investors considered the read-across for PC demand and competition in server processors.
AMD is due to report quarterly results on November 3.
BofA said weakness in the PC market could create a headwind of as much as $750 million for AMD, although stronger server CPU revenue could partly offset the impact.
Broadcom, a major supplier of networking equipment and custom AI chips, fell less sharply but was caught in the wider semiconductor retreat.
Despite its exposure to AI infrastructure demand, the stock moved lower alongside other chipmakers as investors reassessed valuations and spending expectations.
Recently, William Blair trimmed Broadcom from Outperform to Market Perform, highlighting increased valuation risks as the stock trades at over 40 times earnings. This puts shares at risk during sector-wide technology sell-offs.
Amazon adds to AI spending concerns
The pressure on the broader market intensified after Amazon reported its third-quarter results on Thursday.
The company recorded a substantial free-cash-flow drain linked to heavy investment in AI data centres, sending trailing 12-month free cash flow deeply negative. Amazon shares also fell.
The results revived questions about how quickly spending on data centres, chips and related infrastructure will generate returns.
Intel’s weaker outlook raised concerns about demand for traditional computing, while Amazon’s cash-flow figures highlighted the financial burden of AI expansion.
Together, the developments weighed on semiconductor stocks and broader technology sentiment.
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