Intel's historic plunge drags Wall Street's chip index down 7%

Intel's below-expectations sales and profit forecast for the fourth quarter prompted investors questioning the returns on artificial intelligence investments to sell. The Nasdaq Composite fell 7.8% below its record close on October 6.

U.S. stocks closed Friday, October 30, the last trading day of the month, amid heavy selling in technology shares. Weak sales guidance from chipmaker Intel and Amazon's plan to further increase its budget for artificial intelligence infrastructure deepened concerns about when these massive investments would begin generating profits.

The Nasdaq Composite fell 2.86% to 25,437 points, recording its biggest daily loss since June 5. The S&P 500 dropped 1.82% to 7,580 points, while the Dow Jones index fell 1.09% to 51,770 points. More than $1 trillion was erased from the market value of Nasdaq 100 companies in a single session, while the index approached correction territory, defined as a 10% decline from its record level.

Intel's losses spread across the sector

Intel shares lost approximately 29% after the company lowered its fourth-quarter sales and profit forecasts. It was the company's sharpest one-day decline in data going back to the 1980s. Intel CEO Lip-Bu Tan attributed the results to an "unprecedented memory squeeze" and weakening computer demand. Tan said, "I am disappointed that we were unable to meet strong customer demand this quarter."

ABD Ticaret Bakanı Howard Lutnick ve Intel CEO'su Lip-Bu Tan (arşiv, 2025)

The Philadelphia Semiconductor Index fell 7.2%, taking its October loss above 15%. AMD declined 10.9% and Nvidia fell 4.2%, while computer makers Dell and HP lost 10.8% and 9.6%, respectively. The value of the U.S. government's stake in Intel, acquired in August 2025 when it became a shareholder with approximately a 10% stake, has risen 280% since then despite Friday's decline.

Spending concerns weigh on Amazon and Alphabet

Amazon shares fell as much as 10% in after-hours trading following the earnings report released Thursday evening, before narrowing their loss to 1.4% on Friday. The company reported negative free cash flow of $42.4 billion over the past 12 months, while CEO Andy Jassy said they expected to spend approximately $220 billion on capital expenditures in 2026 and planned to spend "meaningfully more" in 2027. Alphabet, which lost approximately $500 billion in market value on Thursday, also fell 1.4% on Friday.

Oliver Pursche of Wealthspire Advisors said, "Companies that are performing and meeting the very high expectations set for them are doing well." The Nasdaq and S&P 500 ended October lower, while the Dow Jones rose for the month. Exxon Mobil and Chevron, which reported quarterly profits that exceeded expectations, ended the day up 2.2% and 2.8%, respectively.

Images: ajay_suresh (cover, CC BY 2.0) / Wikimedia Commons; U.S. Department of Commerce (public domain)

Intel's historic plunge drags Wall Street's chip index down 7%