Arm falls 11.06% as U.S. chip stocks slide as much as 12%
Key Facts
U.S. semiconductor stocks fell between 4% and 12% on Friday, October 30, including Arm, in a selloff Reuters linked to investor concerns about weak PC demand and the rising cost of expanding AI infrastructure. Reuters’ price list showed Arm shares falling 11.06% during the session. The pressure on the stock came amid a broader sector decline, and Reuters did not describe the move as being driven by a company-specific catalyst. At the center of the selloff, Intel shares fell about 30% and were on track for their biggest one-day drop in history. Reuters said weak PC demand and the costs of the AI boom added to investor concerns and weighed on technology stocks.
The selloff followed Intel’s fourth-quarter 2026 outlook, which came in below market estimates. The company forecast revenue of between 15 and 16 billion dollars, compared with the average analyst estimate of 17.07 billion dollars, according to LSEG data cited by Reuters. It also forecast adjusted earnings of 25 cents per share, below analysts’ estimates of 43 cents. The gap between the company’s outlook and market estimates put expected revenue and earnings under more pressure than analysts had anticipated. The impact of the outlook spread to other sector stocks, including Arm, AMD, Qualcomm, Nvidia, Broadcom and Micron, which fell between 4% and 12%.
Intel attributed weakness in the PC market to higher device costs as memory prices rose, saying the increase had “impacted demand.” The factor combined pressure on consumers’ ability to buy PCs with concerns about demand for products tied to the market. By contrast, the company said supply constraints had limited its ability to meet demand for data-center chips. This meant investor concerns extended beyond weak PC demand to include Intel’s ability to meet the needs of the data-center sector. Both factors emerged as market concerns about the cost of expanding AI infrastructure grew.
A fatal explosion at an Intel factory in Israel added to the pressure on the company’s outlook, with Intel estimating it would reduce revenue by about 600 million dollars over two quarters. The company also said the incident would reduce supplies of AI server chips to cloud customers. The expected revenue loss thus coincided with constraints affecting products for data centers, at a time when Intel had already cited difficulty meeting demand for those chips because of supply constraints. The overlap between pressure in the PC market and challenges supplying server chips underscored the complexity of the outlook facing investors. Reuters cited the estimated impact of the incident among the factors surrounding the company’s fourth-quarter outlook.
The selloff was preceded by a 1.4% decline in the semiconductor index during regular trading on October 29, following Alphabet’s earnings report. The index then fell further after Intel pointed to “near-term headwinds in the PC business.” This places the sector’s October 30 share declines within a stretch of pressure that began before the latest selloff, rather than as a move disconnected from the market’s performance the previous day. Still, Intel’s weak outlook added a new source of concern about PC demand and the costs of the AI boom. In this environment, losses spread across multiple companies, including Arm, in a broad decline in U.S. chip stocks.
The semiconductor index had risen more than 60% during 2026 before falling 13% from its recent peak in October, leaving it 21% below its record high set in June, according to Reuters. This puts the latest selloff against a backdrop of strong gains for the index during the year, followed by a notable retreat from elevated levels. Concerns about weak PC demand and the cost of the AI boom come as the index had already lost ground from both its recent and record highs. For Arm, the next date the company has set for investors is the release of its fiscal 2027 second-quarter results on November 4, after the market close. Arm announced the date on October 5 and scheduled a call to review results and business prospects at 14:00 Pacific time.