Wall Street is mostly sweeping up last week’s tech wreckage Monday. Chip stocks keep tracking mud back through the house.
About 7 in 10 S&P 500 stocks are rising, yet nearly every chip stock is in the red, and the group has shed more than $300 billion in market value in a single session, by Yahoo Finance calculations.
Intel (INTC) is leading the way down again.
59.97 -5.79 (-8.80%)
At close: 4:00:01 PM EST
60.09 +0.12 (+0.21%)
After hours: 4:22:22 PM EST
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The chipmaker is sliding after its worst day since 1974 on Oct. 30, when a disappointing forecast knocked nearly 29% off the stock. A close below about $60.12 on Monday would leave Intel worth less than half of what it was when September ended.
And the damage isn’t staying at Intel.
Micron (MU), Sandisk (SNDK), Seagate (STX), and Western Digital (WDC) — the memory and storage names that led the chip boom this year — are all getting clobbered. Marvell (MRVL) is falling even harder, a drop that came as it agreed to buy Lumentum (LITE) in a $115 billion deal. Nvidia (NVDA) is holding up better than most, but it’s still down about 15% since Oct. 6.
Zoom out and the mess gets bigger. Chip and memory stocks have lost roughly $3.5 trillion in market value since Oct. 6, by Yahoo Finance calculations. Nvidia lost the most in dollars, but Intel’s drop of nearly half is the steepest among the giants.
Not everything tied to AI is bleeding. SpaceX (SPCX) is moving higher, though it’s still well below where it started October. Software is mixed, apart from cybersecurity stocks like Fortinet (FTNT) and CrowdStrike (CRWD), which are falling with chips.
Adam Johnson, founder of the Bullseye Brief and portfolio manager of the American Ingenuity Fund, thinks last week’s selloff already priced in the worst.
“The market kitchen-sinked it,” Johnson told Yahoo Finance on Monday. “They discounted everything that could go wrong. And when you do that, typically that’s when you see a bottom.”
John Chambers, founder and CEO of JC2 Ventures and Cisco’s former CEO, expects the gap between winners and losers to keep widening.
“There will be major train wrecks,” Chambers told Yahoo Finance, also on Monday. “And rising tide does not raise all boats. I would not bet against Nvidia.”
Stock Trader’s Almanac editor Jeff Hirsch, who coined the term “Octoberphobia,” bought the selloff on Oct. 30. History is on his side. Chips have climbed in all eight midterm cycles since 1994, measured from the last October close through the following June, by Yahoo Finance calculations. But in 2002 and 2018, they first fell about another 11%.
Next up is AMD (AMD), which reports third quarter results Tuesday after the bell, the same day as the midterm vote.
