Updated Version 2 - Intel Shares May See Worst Single-Day Performance in History, Triggering Global Chip Stock Plunge

Updated stock price, added chart, and supplemented with additional details

Anhata Rooprai

Reuters, October 30 - Intel INTC.O shares plummeted 29% on Friday, poised to mark their biggest single-day drop ever, intensifying a broader pullback in tech stocks as investors grew increasingly concerned about weak personal computer demand and massive spending required to build artificial intelligence infrastructure.

The plunge could wipe out more than $137 billion from the US chipmaker’s market value, highlighting the challenges CEO Lip-Bu Tan faces during the company’s transformation — as a persistent PC market slump offsets hefty investments in AI and manufacturing expansion.

Semiconductor stocks including Advanced Micro Devices AMD.O, Arm Holdings ARM.O, Qualcomm QCOM.O, Nvidia NVDA.O, Broadcom AVGO.O, and Micron MU.O fell between 2% and 10%.

“The market is currently in a ‘sell first, ask questions later’ mood, and Intel’s warning provided investors with an easy excuse to take profits from chip stocks,” said Matt Britzman, Senior Equity Analyst at Hargreaves Lansdown.

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The sell-off spilled over to server manufacturers, reflecting investor caution toward companies linked to the semiconductor and AI infrastructure supply chain.

Server makers Dell Technologies DELL.N, Hewlett Packard Enterprise HPE.N, and Super Micro Computer SMCI.O all saw their share prices fall between 6% and 10%.

The STOXX Europe 600 Technology Index .SX8P dropped 2%, with sector heavyweight ASML ASML.AS sliding 4.6%. US-listed shares of the world’s largest chip contract manufacturer, TSMC 2330.TW, declined 3.3%.

According to data compiled by London Stock Exchange Group (LSEG), Intel (link) expects fourth-quarter revenue to be between $15 billion and $16 billion, below the average analyst estimate of $17.07 billion.

Chief Financial Officer David Zinsner also stated that Intel does not expect to generate positive cash flow this year.

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Worsening Memory Shortage

Driven by suppliers shifting capacity toward AI-focused high-bandwidth memory chips, memory prices have risen, pushing up the cost of personal computers and further weighing on already weak consumer demand.

PC chips accounted for roughly half of Intel’s third-quarter revenue, and the company expects sales in this segment to decline more than 20% sequentially this quarter after falling 5% in September.

“The key is whether Intel can expand the supply of higher-margin Xeon products to help offset the emerging weakness in the PC business,” said Brian Mulberry, Chief Market Strategist at Zacks Investment Management.

“Ultimately, weak volumes, rising manufacturing costs, and a product mix that doesn’t align with the market cycle will cause the stock to fall in the short term, as future earnings face significant pressure.”

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