Shares of Intel Corp. and Advanced Micro Devices continued their declines Friday, as a sell-off in semiconductor stocks accelerated and investors continued to react to Broadcom’s weaker-than-expected AI outlook.
The broad-based decline came after Broadcom’s fiscal second-quarter earnings report, which beat top-line expectations but fell short of the market’s ambitious hopes for AI-related growth.
The disappointment triggered a second straight day of losses for chipmakers that have helped drive U.S. stocks to all-time highs in recent months.
INTC shares fell 8% on the session, hitting an intraday low of $101.55, and were trading at $102.48 at the time of writing.
AMD also fell around 8%, increasing pressure on the semiconductor sector.
Broadcom’s guidance shakes up the semiconductor sector
The catalyst for the new selloff was Broadcom’s forecast for third-quarter AI chip revenue of about $16 billion, below analysts’ expectations of about $17.2 billion.
The company also declined to raise its annual revenue forecast for AI chips.
Broadcom shares lost more than 5% on Friday after falling 13% in the previous session.
According to Dow Jones Market Data, Thursday’s drop wiped out about $286 billion in capitalization, constituting the fourth largest one-day loss in value ever recorded for a U.S.-listed company.
The weakness quickly spread across the entire semiconductor industry.
Micron Technology, Qualcomm, Arm Holdings and Marvell Technology also fell as investors questioned whether the AI-fueled rally in chip stocks could maintain its momentum.
Broadcom’s earnings call also increased investors’ concerns, after Chief Executive Hock Tan indicated that Google, a major custom chip customer, was likely to diversify its supply chain.
Intel facing valuation concerns
While the broader sector downturn weighed on Intel, the stock also came under pressure from a recent downgrade by an analyst.
Northland Capital Markets lowered its rating on Intel to Market Perform from Outperform, with analyst Gus Richard estimating that the stock’s roughly 500% rise over the past year had already priced in much of the expected operational turnaround.
The analyst also warned of a potential slowdown in hyperscale data center spending starting in 2027, which would create additional uncertainty for semiconductor demand.
The combination of Broadcom’s cautious outlook on AI and lingering valuation concerns left Intel particularly vulnerable during Friday’s risk-off session.
AMD affected despite solid long-term dynamics
AMD also came under pressure as investors exited high-growth AI stocks.
Research firm Zacks recently downgraded the stock from “strong buy” to “hold,” citing a price-to-earnings ratio of about 173 times earnings and a stock price that significantly exceeded analysts’ average target.
Investor sentiment was further weighed down by recent selling activity.
ARK Invest reduced its position in AMD by approximately $39 million on June 3, while insider sales over the previous three months totaled more than $122 million.
Despite the recent pullback, AMD shares remain up about 116% year to date, although the stock is still trading below its recent 52-week high.
