Intel's $120 Billion Wipeout Drags Chip Stocks Into Broad Selloff

Intel lost about $120 billion in market capitalization on Friday, more than a quarter of its value, after soft fourth-quarter guidance triggered a selloff across the semiconductor sector.

The rout reached every corner of the supply chain. Advanced Micro Devices plunged nearly 10% at the open. Micron Technology slipped 5.5%. Broadcom opened about 4% lower. Equipment makers followed: Applied Materials fell nearly 5% and Lam Research lost 5.5%.

What drove Intel's guidance cut?

Intel reported earnings on Thursday. The company guided below expectations for the fourth quarter and forecast a prolonged slowdown in personal-computer sales. It blamed high memory-chip prices as the main cause.

That memory cost pressure lands directly on Micron, the sector's largest U.S. DRAM supplier, and on PC processor rivals. Investors sold both groups together.

How far did the selloff spread?

The damage extended well beyond Intel and its direct competitors. Wafer fab equipment makers fell because chipmakers signal capital spending cuts when end demand weakens, and the sector remains exposed to both memory and logic spending reductions.

Qualcomm traded lower in sympathy with broader wireless and handset demand. Investors cited fears of enterprise hardware sluggishness and smartphone demand bottlenecks.

The chip pullback capped a bruising week for Big Tech and AI stocks. Earnings from Alphabet, Amazon and Meta Platforms unsettled investors and raised questions about the payoff from AI-infrastructure spending.

What happened at Alphabet and Amazon?

Alphabet suffered its worst day on record Thursday. The company said Google search revenue growth waned because AI searches are less lucrative than traditional queries.

Amazon fell about 4.5% on Friday. Third-quarter revenue and net income both missed analysts' estimates. Overall free cash flow plunged to a $42.4 billion outflow.

What did Meta signal about AI spending?

Meta reported last week, before Alphabet and Amazon. The company said it plans to keep spending "aggressively" on AI and unveiled plans to raise up to $95 billion in waves of stock offerings. The program includes a new class of nonvoting stock in an at-the-market offering of up to $60 billion.

Meta's free cash flow turned negative for the first time since its public debut. It reported negative free cash flow of $2.1 billion, better than analyst projections of negative $9.4 billion.

Why do Intel's numbers matter so broadly?

Intel remains a bellwether for the whole equipment and materials food chain. Its net sales break down into computing architecture products at 69.7% and wafer manufacturing services at 25.3%, with the remainder in other lines. Geographically, the United States accounts for 29.8% of net sales, China 24%, Singapore 18.1% and Taiwan 14.5%.

A weak PC forecast from a company of that mix reads as a demand signal for foundries, analog suppliers and toolmakers alike. Friday's trading showed exactly that transmission: one guidance cut, sector-wide losses.

The question now is whether memory pricing, which Intel blamed for the PC slowdown, eases enough in coming quarters to stabilize both system costs and chipmaker capital budgets.