Semiconductor Index Falls 6.7% as AI Spending Concerns Return
Key Facts
The Philadelphia Semiconductor Index fell 6.7% in the Oct. 22 session as concerns about the AI spending race returned after a run of corporate results, Reuters reported. The decline was part of a broader sell-off that sent the Nasdaq Composite down 2.6%, while the S&P 500 lost about 1.2% in its worst day since July, according to the Associated Press. Reuters said the Nasdaq posted its biggest daily drop since early June after results from prominent companies raised fresh concerns about the cost of expanding in AI. The U.S. chip index ended the session more than 26% below its record closing high set on June 22. Still, it was up 51.5% year to date through Oct. 22, Reuters reported. The session reflected a broader reassessment of sector stocks as companies face questions about the scale of investment and how it will be financed.
Intel shares fell 8.04%, while AMD shares declined 8.10% on Oct. 22, according to Reuters data published by Investing.com. Nvidia shares fell 4.4%, while CoreWeave dropped 10.1% amid concern about the company’s debt, the Associated Press reported. The losses came as chip and AI infrastructure companies faced pressure, while broader indexes also declined. Reuters said the sell-off came amid renewed concerns about the AI spending race, as results from major companies refocused attention on the cost of expansion. Meta was among the companies whose results prompted that debate: its report combined strong revenue growth with a sharp increase in capital investment, while its shares fell after the results.
Meta shares fell 7% on Oct. 22, even though its quarterly revenue topped analysts’ expectations, while profit fell short, the Associated Press reported. Revenue reached $64.60 billion in the third quarter of 2026, up 26% from $51.24 billion in the same period a year earlier and above Wall Street estimates of $63.34 billion. Net cash from operating activities was $32.79 billion, but free cash flow showed a deficit of $2.12 billion, according to the company’s filing with the U.S. Securities and Exchange Commission. Capital expenditures totaled $34.91 billion during the quarter, including finance lease principal payments. The Associated Press said Meta’s results came as investors questioned the cost of borrowing to build data centers and buy more AI chips. Revenue therefore beat expectations alongside substantial capital spending and negative free cash flow, while the company’s profit fell short of analysts’ expectations.
Financing concerns extended to Meta’s capital structure moves: the company announced the creation of a new class of non-voting Class C common stock. The Associated Press said the company intends to issue shares of this class to raise money for AI investments and other expenses. Meta’s filing said the new class will take effect in January 2027 and that the board approved its creation as a publicly traded, non-voting class of common stock. The filing specifies when the class takes effect, while the agency described its purpose as raising money for investment and spending; the company did not announce in these two reports that a share issuance had been completed. On spending, Meta raised its 2026 capital expenditure forecast to $135–145 billion from a previous range of $130–145 billion, including finance lease principal payments. The revision puts expected spending at the center of investor attention as the company seeks to expand its AI infrastructure.
Oil’s rise added to pressure during the session, with Brent crude climbing 4% to $113.17 a barrel on Oct. 22 after touching its highest level in five months, the Associated Press reported. The report linked the increase to Houthi attacks in Saudi Arabia and concerns about disruption to global energy supplies. In the bond market, the yield on 10-year U.S. Treasuries fell to 4.97% from 5.13% late Wednesday. The yield decline coincided with the stock sell-off as investors focused on borrowing costs needed to build data centers and buy chips. The agency said the cost of borrowing to build these centers and buy more AI chips had become a concern for investors. Those concerns coincided with rising oil prices in a session when AI shares and major U.S. indexes fell.
Attention is now turning to Intel’s third-quarter 2026 results, scheduled for Thursday, Oct. 29, after the market close, according to the company’s announcement. Intel said its results call will begin at 2 p.m. Pacific time that day. The date follows an 8.04% drop in the company’s shares in the Oct. 22 session and comes amid broad losses in the semiconductor index and AI-related stocks. The coming quarterly results will provide an update on the company’s performance after a session that saw the sector reassessed, while the chip index remained higher year to date despite its steep fall from its peak. Investor concerns during the session centered on spending and financing, as reflected in the market reaction to Meta’s results and capital plan. Intel’s official announcement sets the date for its results and investor call.