Global Chip Stocks Tumble as Intel's Disappointing Performance Sparks Industry-Wide Concerns

Chip Stocks Staring At Another Bloodbath As Intel Tumbles, Nvidia Dips 4%, ASML Crumbles Over 6%: What's Ailing The Sector Friday - Advanced Micro Devices (NASDAQ:AMD), ARM Holdings (NASDAQ:ARM)

The tech stocks, which led the stock market rebound seen since in early 2023, have come under pressure since early July, with the weakness more concentrated in the semiconductor space. Early indications suggest these stocks could be in for more losses on Friday. Economic Evidence Not-so Positive: The iShares Semiconductor ETF SOXX traded down about 3% in premarket trading, adding to the 7%+ drop seen on Thursday. The sell-off seen on Thursday came on the back of some sore data points, including weak manufacturing activity data and a spike in jobless claims. These data points added weight to the view that the economy is slowing down and could potentially face the risk of a hard landing. Don't Miss: Amid the ongoing EV revolution, previously overlooked low-income communities now harbor a huge investment opportunity at just $500. If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it? The Federal Reserve Chairman Jerome Powell and his team have hinted at beginning rate cuts as early as the September meeting. Rate cuts could bring the spotlight to the SMID-cap stocks, which have underperformed the broader market in the bull run seen since 2023, accelerating the rotation out of mega-cap techs. Incidentally, small-caps also retreated on Thursday, suffering more losses relative to the tech stocks. Sector-Specific Risks: Semiconductor stocks are facing some sector-specific risks such as the U.S.-China standoff, which will remove from the equation a key market for these companies. Nvidia Corp. NVDA and Advanced Micro Devices, Inc. AMD are already facing the music as they scramble to offset the impact by rolling out chips that can help them sidestep the China chip ban imposed by the U.S. See Also: Don't miss out on the next Nvidia - you can invest in the future of AI for only $10. Regulatory overhang is an added impediment for these companies. Nvidia for one is stymied by the possibility of the U.S. Department of Justice initiating a probe over the Jensen Huang-led company monopolizing the market for AI accelerators. Also weighing down on sentiment is a disappointing earnings report for Intel Corp. INTC and the company also announced workforce reduction and suspension of dividends in the wake of the predicament. The ultimate fate of chip stocks in Friday's session will hinge on how the July non-farm payrolls report pans out. A modest slowdown in job growth and contained average hourly earnings could prompt traders to buy back beaten-down stocks. On the contrary, very weak job growth and/or a rise in the average hourly earnings - a proxy for inflation, could steepen the sell-off. Trending: America's construction sites are desperate for Robots -- here's how to invest in a house-printing startup who's making them and be a part of a $16 trillion industry. The Stock Moves: Intel is leading the sell-off with a 21.79% plunge to $22.72, according to Benzinga Pro data. Among the other major decliners in the premarket are: ASML Holding N.V. ASML fell 6.52% to $826.13. Arm Holdings plc ARM was down about 5.37% to $114.38. AMD was down a more modest 0.70% to $131.61. Broadcom Inc. AVGO fell 2.30% to $140.64. Micron Technology, Inc. MU slipped 3.46% to $96. The SOXX has pulled back to a nearly 2-month low with its plunge on Thursday. The exchange-traded fund closed at its lowest level since May 9, settling down 7.21% to $218.42. In the premarket on Friday, it was down 2.94% at $211.99. Among the other sector-specific ETFs: VanEck Semiconductor ETF SMH fell 3.68% to $222.50. Direxion Daily Semiconductor Bull 3X Shares SOXL plunged 7.91% to $32.23. GraniteShares 2x Long NVDA Daily ETF NVDL, an ETF that tracks Nvidia's performance, fell 7.48% to $47.60. Read Next: When today's AI startups go public, most of the rapid growth will be behind them -- here's how not to get left out. A billion-dollar investment strategy with minimums as low as $10 -- you can become part of the next big real estate boom today. Photo by Igor Omilaev on Unsplash Market News and Data brought to you by Benzinga APIs

Chip Stocks Slump After Intel Job Cuts, Sales Performance Weigh on Sector -- Update

Chip makers' shares plunged Friday after Intel said it would slash thousands of jobs and halt dividend payments following a quarterly loss as it jockeys for position in a market increasingly dominated by demand for artificial-intelligence chips. Intel said it would lay off more than 15,000 employees, most of them by the end of this year, as part of a $10 billion cost-saving drive. Chief Executive Pat Gelsinger said the chip maker had to adjust to market conditions, particularly a surge in demand for AI chips that is much more acute than he had expected. Intel's stock fell more than 20% in premarket exchanges Friday. AI chips have turbocharged the sales and valuation of rival Nvidia, but the stock is down 3.5% premarket, a sign that even Nvidia isn't immune to wider market sentiment. While Nvidia seized the AI opportunity from the get-go, Intel has struggled to gain a foothold in the market for AI chips. Chief Financial Officer David Zinsner said that gross margin headwinds from the acceleration of Intel's AI PC development had weighed on second-quarter results. For the current quarter, Intel is forecasting sales of $12.5 billion to $13.5 billion. Jefferies analysts wrote in a note to clients that this guidance is about 10% below consensus. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding lost more than 8% in afternoon trading, while smaller peer ASM International fell nearly 11%. Elsewhere in the continent, shares of Infineon Technologies and Apple supplier STMicroelectronics dropped about 4%. Meanwhile in Asia, shares of Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, closed down nearly 6% in Taipei. Shares of SoftBank Group, the parent of British chip designer Arm Holdings, closed 8% lower in Tokyo, while chip-making equipment maker Tokyo Electron shed 12%.

Global Chip Stocks Plunge as Intel, Tech AI Spending Spook Investors

Intel shares are plunging 24% in premarket trading on the back of a litany of bad news. The chipmaker reported everything from a wider-than-expected second-quarter loss to a grim growth forecast, a dividend halt plan, and a $10 billion turnaround that includes cutting 15% of its workforce. Shares of Dutch semiconductor-gear maker ASML Holding (ASML) are falling 6%, and American depositary receipts (ADRs) of British chip designer Arm Holdings (ARM) and Taiwan Semiconductor Manufacturing Company (TSM), the world's largest contract chip maker, are both dropping 5%. In Japanese trading Friday, Tokyo Electron, which makes etching machines for semiconductor factories, closed 12% lower and Arm majority owner SoftBank Group fell 8%. Amazon (AMZN) shares are falling about 10% in premarket trading after the tech titan's third-quarter revenue outlook fell short of analysts' estimates and ramped up spending on AI initiatives. Amazon spent $17.62 billion in Q2 purchases of property and equipment, a 54% jump from a year ago.

Asian, European Chip Stocks Slump After Intel Performance Disappoints

Shares of semiconductor companies across Asia and Europe edged lower Friday after Intel's second-quarter sales and third-quarter guidance undershot analysts' forecasts and the group set out plans to lay off thousands of employees this year. Intel Chief Executive Pat Gelsinger said the chip maker had to adjust to market conditions, particularly a surge in demand for artificial-intelligence chips that is much more acute than he had expected. Intel stock plunged 20% in premarket trading. Meanwhile in Asia, shares of Taiwan Semiconductor Manufacturing Co., the world's largest contract chip maker, closed down nearly 6% in Taipei. Shares of SoftBank Group, the parent of British chip designer Arm Holdings, closed 8% lower in Tokyo, while chip-making equipment maker Tokyo Electron shed 12%. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding lost more than 6% in morning trading, while smaller peer ASM International fell 9%. Elsewhere in Europe, shares of Infineon Technologies and Apple supplier STMicroelectronics fell more than 3%.