Intel’s weak performance puts pressure on chip stocks

Sinéad Carew

Reuters New York, October 29 - After Intel (link) released weak quarterly results on Thursday, chip stocks suffered another major blow, which may bring some points of interest for market trends when trading resumes on Friday.

After Thursday’s close, the semiconductor index .SOX saw a sell-off, after chipmaker Intel INTC.O attributed the weakness to “short-term headwinds in the personal computer industry,” causing its shares to plummet 18% in after-hours trading. Previously, impacted by the disappointing earnings report (link) released by heavily AI-invested Alphabet GOOGL.O on Wednesday, the SOX index had already fallen by 1.4% during regular trading.

Intel stated that there was an explosion at a factory in Israel, which has been shut down for about two weeks, and is expected to result in a revenue loss of around $600 million over two quarters. Intel’s share decline also dragged down other major chip stocks in after-hours trading.

Michael James, equities sales trader at Rosenblatt Securities, said, “The overall weakness in semiconductors after hours is mainly due to Intel’s earnings guidance and the spreading of negative sentiment.”

The challenges Intel faces in the personal computer sector—a tech field that hasn’t attracted as much attention on Wall Street as AI infrastructure—do not necessarily indicate major issues for other chipmakers more active in the artificial intelligence space.

Nevertheless, in the light trading of after-hours sessions, investors opted to sell first and ask questions later. AMD (AMD.O) fell 4%, Broadcom (AVGO.O) dropped 2%. Among the most volatile of the day’s trades, the Direxion Daily Semiconductor Bull ETF (SOXL.K)—which offers investors triple daily returns on the SOX index—fell by as much as 9% during the session.

“Due to weak PC demand, revenue missed expectations, and the forward guidance was disappointing. As Google learned today, earnings are crucial,” said Kim Caughey Forrest, founder and Chief Investment Officer of Bokeh Capital Partners LLC. Shares of Alphabet, Google’s parent company, fell 13% on Thursday.

The SOX index is one of the standout performers of 2026, up more than 60%. This is because shortages of chips and equipment needed for AI infrastructure have driven up prices and profits for companies from giant Nvidia (NVDA.O) and memory chip maker Micron (MU.N) to Marvell Technology (MRVL.O).

However, over the past month, tightening financing conditions have challenged momentum in the sector. This has led some companies to postpone planned IPOs and put pressure on some heavily-leveraged AI infrastructure firms. Since hitting a recent high in October, the SOX index has fallen 13% and is down 21% from its record high in June.

That said, compared to the greater liquidity of regular trading hours, pre-market and after-hours sessions tend to amplify price swings, especially for stocks influenced by news from competitors.

“I don’t think this should have a major impact on the market,” said Kim Caughey Forrest. “It sounds like a PC issue. AMD could also be a target for selling tomorrow. Intel has little to do with AI, so the market may well ignore it.”

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