US chip stocks suffer 'Black Friday': Intel plunges 30%, Nvidia's market cap falls below $5 trillion

October 30 - According to data from the BIT stock platform, during U.S. stock trading on October 30, the semiconductor sector experienced widespread selling. Intel plunged 30% after the open, the Philadelphia Semiconductor Index fell 5.7%, AMD dropped about 10%, Arm fell 9.5%, Nvidia declined 3.3%, and its total market capitalization fell below $5 trillion. The Nasdaq 100 index fell about 3% at one point, and the S&P 500 index dropped about 1.25%.

Intel's fourth-quarter guidance falling short of expectations was one of the main pressures. The company expects revenue of $15 billion to $16 billion, below the market expectation of $17.07 billion; adjusted earnings per share are projected at $0.25, below the expected $0.43. Its third-quarter PC chip business revenue fell 5% year-over-year to $8.1 billion, and management expects the PC market downturn to last at least until the first half of 2027, noting that AI demand is driving up memory prices and increasing costs for PC manufacturers.

Bank of America downgraded Intel to Neutral and cut its target price to $100, believing that pressure in the PC business offsets data center performance, and that the external foundry business has not yet shown sufficient appeal. Bernstein believes that the market's previous optimism about server and foundry prospects masked the deterioration in PC outlook, and Intel still faces a mismatch of PC overcapacity and server undercapacity. The selloff also spread to memory and equipment companies. Micron fell 5.5%, Qualcomm dropped 6.3%, Broadcom fell about 4%, Applied Materials declined nearly 5%, Lam Research fell 5.5%, and Kioxia's American Depositary Receipts dropped about 15%.

Amazon's revenue and earnings per share falling short of expectations also heightened market concerns about returns on AI spending. The company's capital expenditure this year is expected to remain at $220 billion, with plans for further expansion next year. However, Matt Orton, Chief Investment Strategist at Raymond James, believes that this is not a "reckoning moment" for tech giants, and the fundamental logic for beneficiaries of AI capital expenditure remains solid, but investors should re-examine crowded tech stock positions.

There is still notable divergence within the market, with the S&P 500 energy and healthcare sectors rising about 1.8% and 1.4%, respectively. JPMorgan's trading team believes that renewed concerns about AI monetization capabilities are driving deeper sector rotation, and tech heavyweight stocks will continue to drag on the broader index's short-term performance.