Semiconductor stocks had their worst day of the earnings season on Friday. The semiconductor basket tracked in the market tables fell 8.24 percent to 471.51 dollars, Broadcom fell 5.48 percent to 326.08 dollars, Nvidia fell 4.22 percent to 204.64 dollars, and the broader tech sector measure fell 4.89 percent. Seoul Economic Daily put the Nasdaq Composite down 2.86 percent to 25,437.00 and the Philadelphia Semiconductor Index down about 7 percent, with AMD down 10.88 percent, Micron down 5.30 percent, TSMC down 5.95 percent and SK hynix down 7.95 percent in the same session.
Two reported results drove the move. Intel fell about 29 percent in regular trading, extending Thursday’s after hours drop, after guiding fourth quarter revenue to 15 billion to 16 billion dollars against expectations near 17.1 billion dollars. Amazon fell 1.41 percent in the tables, and more in premarket trading, after reporting a trailing free cash flow deficit that Seoul Economic Daily put at negative 42.4 billion dollars, with purchases of property and equipment for data centres and AI gear up 94.8 billion dollars over the year. Reuters reported Amazon and Intel together were poised to lose about 300 billion dollars of market value if the premarket losses held.
The selling was not confined to the two reporting names, which is what makes it a sector story rather than two stock stories. Every large chip name fell between 4 and 11 percent, and the megacaps fell with them: Microsoft down 1.55 percent, Meta down 1.53 percent, Alphabet down 1.40 percent and Apple down 1.23 percent in the tables. TechCrunch’s post earnings analysis described cracks emerging in the AI spending boom, as the week’s prints from Alphabet, Amazon and Intel each paired strong AI demand with cash flow or margin damage.
The distinction the market is drawing is between demand and funding. Nothing in the week’s results showed customers buying fewer accelerators; KLA guided its December quarter higher and cloud spending data released the same day showed enterprise cloud revenue up 55 percent year on year. What changed is the price investors will pay for earnings that arrive after very large, debt and cash funded capacity programmes. A sector that falls 8 percent on that question, rather than on a demand miss, can recover on a single strong print, and can also keep falling if the next prints repeat the cash pattern.