Intel shares fall 28.6% as technology selloff widens and concerns mount over AI returns
Key Facts
The technology stock selloff widened on October 30, with Intel shares falling 28.6% and the Nasdaq 100 dropping to 28,266.22 points from 29,402.51 points in the previous session. The Associated Press said Intel's loss was the stock's largest since 1974, after the company's forecast for fourth-quarter profit fell short of analysts' estimates. Investors this week turned their attention to whether artificial intelligence investments can generate a positive return and how long that might take, according to Oliver Pursche, senior vice president at Wealthspire Advisors. Pursche added that companies that miss market expectations are punished. The moves came amid concern that the cost of expanding AI infrastructure could exceed the returns it generates.
Pressure spread beyond individual company shares to the chip sector, with the broader semiconductor index losing 7.2% and heading for a monthly loss of more than 15%, according to Reuters. Nvidia shares also fell 4.2%, making them the single biggest drag on the S&P 500, outweighing the impact of Intel's decline. In the previous session, Alphabet shares fell more than 12%, their worst daily performance ever, after telling investors it had used more cash in the summer than in the spring because of AI investments. Reuters linked the Nasdaq 100's trading volatility to Meta, Alphabet and Amazon raising their spending forecasts as they expand AI infrastructure. The agency noted that the index had fallen more than 5.8% in October and that its market-value losses could exceed $2 trillion for the month.
The decline spread to Asia, where South Korea's Kospi fell 3.5% in the October 30 session, as the technology-heavy market was hit by AI concerns. In the United States, the 10-year Treasury yield fell to 4.93% from 4.98% late on Thursday. The Associated Press attributed the yield decline to investors turning to bonds in search of a safer haven. This came as the market reassessed whether companies' AI investments would generate a positive return, a question Pursche said was on investors' minds this week. Chip and technology stock pressure thus coincided with demand for Treasury bonds during the selloff.
In the crypto-assets market, Binance said its hot wallets were breached at around 20:05 UTC on October 29, resulting in estimated losses of about $6.3 billion in tokenized assets. The company added that it had frozen nearly $3 billion in on-chain assets as of its October 30 update. Binance said it would cover the stolen funds linked to the incident from its user protection fund and treasury. The company said it had found no evidence that private wallet keys had been leaked, while withdrawals remained temporarily suspended and deposits and other unaffected services continued. The breach announcement and response measures coincided with a technology stock selloff, though the company did not identify a link between the incident and the stock declines.
Attention turns next week to Apple's results, according to Reuters, and then to Nvidia, which is expected to report in mid-November. The agency described Nvidia as a prominent gauge of the AI sector, as investors watch whether companies can turn infrastructure expansion into returns. The stock's 4.2% loss in the October 30 session put the company at the center of the chip decline. Its expected results date also comes after a month in which the Nasdaq 100 fell more than 5.8%, according to Reuters' estimate. These announcements will provide new milestones for tracking major companies' performance and AI spending.