Nasdaq Falls 2.3% as Intel Drops 29% and Chip Stocks Sell Off

Key Facts

The Nasdaq Composite fell 2.3% at 11:06 a.m. Eastern time on Friday, October 30, while the Dow Jones Industrial Average dropped 0.5%, or 274 points, according to the Associated Press. The losses came amid a sell-off in technology and semiconductor stocks, led by concerns about a weak PC market and the cost of expanding AI infrastructure. Intel shares fell 29% during the session and were on track for their biggest one-day drop, according to a Reuters update. The decline spread to chip stocks even as SK Hynix results showed strong memory demand. The contrast between strong memory demand and a weak PC market refocused investors on the cost of investment and when returns might emerge.

Reuters said Intel’s fourth-quarter outlook came in below the average analyst estimate: the company forecast revenue of between $15 billion and $16 billion, compared with an average of $17.07 billion. Intel said it did not expect positive cash flow this year, adding to concerns about financing its expansion. It also warned that the PC market would remain weak through at least the first half of 2027. PC chips accounted for about half of the company’s third-quarter revenue, according to Reuters. Intel expects sales in that segment to fall by more than 20% quarter over quarter in the fourth quarter, after declining 5% in the September period.

Intel’s warning affected more than its own shares. Shares of semiconductor companies including AMD, Arm, Qualcomm, Nvidia, Broadcom and Micron fell between 2% and 10% on Friday, according to Reuters. An analyst at Hargreaves Lansdown said Intel’s warning gave investors “an easy excuse to take some profits in chip stocks.” Pressure spread to server makers, with Dell, Hewlett Packard Enterprise and Super Micro shares falling between 6% and 12% in premarket trading. In Europe, the Stoxx 600 technology index fell 2%, while ASML shares dropped 5.4% in premarket trading. The moves reflected a broadening sell-off across different parts of the technology supply chain.

Memory prices offer another link between the AI boom and the PC market: Reuters said suppliers’ shift of capacity to high-bandwidth memory for AI is pushing up memory prices and the cost of computers. This comes as consumer demand for PCs weakens, adding pressure to chip sales in the segment. By contrast, SK Hynix expects memory demand to continue exceeding supply through 2030. The company attributed that outlook to the difficulty of advanced manufacturing technologies and the time required to build new production facilities. The divergence between memory-demand forecasts and weakness in the PC market illustrates the split within the chip sector.

In results for the quarter ended September 30, Amazon Web Services sales rose 39.3% to $46 billion, the company’s fastest growth rate in nearly five years, according to the Associated Press. But cloud-computing growth did not dispel investor questions about the spending needed to expand data centers and whether massive AI investments can generate enough profit and productivity to justify their cost. The agency said concerns about the scale of these investments and the returns they may deliver intensified as technology stocks fell. Those concerns coincided with Intel’s weak outlook for the PC market, adding to pressure on sector stocks in Friday’s session. The company’s announced timelines relevant here fall in the fourth quarter of 2026 and the first half of 2027, while SK Hynix’s outlook for a supply-demand imbalance extends through 2030.

On the memory front, SK Hynix plans to raise capacity at its M15X plant to the maximum level by the end of 2026. The company expects HBM4 shipments and revenue to surpass those of HBM3E in the fourth quarter of 2026. It also said its long-term agreements with customers cover more than 50% of its production capacity for 2027 and 2028. These steps put the company’s demand and production outlook at the center of the picture alongside Intel’s warnings about the PC market. In the broader market, the sell-off has raised questions about whether expected profits and productivity will be enough to justify AI-related spending.