Chip Stocks Plunge: AMD Falls 9% as the AI Selloff Spreads

Chip stocks plunged before the opening bell on Friday, October 30, 2026, as Advanced Micro Devices (AMD) tumbled 9%, Micron and Marvell fell about 6%, and the iShares Semiconductor ETF (SOXX) dropped more than 6%. The broad selloff followed weak outlooks from Intel and Amazon late Thursday, which reignited fears that massive AI spending is not paying off fast enough.

What happened

Major chipmakers were down sharply across the board ahead of Friday's open. AMD tumbled 9% in premarket trading, while Micron (MU) and Marvell Technology (MRVL) dropped about 6% each, and Nvidia (NVDA) and Broadcom (AVGO) declined more than 3%, according to Investopedia. A separate premarket snapshot showed the pain was even wider: Intel fell 24.2%, Arm dropped 7.9%, Applied Materials fell 4.8%, Lam Research declined 4.5%, Micron and ASML each fell 4%, and TSMC declined 3%, according to KuCoin's market flash.

Futures told the same story. Nasdaq futures were down about 2.6% and S&P 500 futures fell about 1.1% in early trading, while Dow futures hovered near unchanged — a sign the selling was concentrated in technology rather than spread evenly across the market.

Why it's blowing up

The trigger was Intel. The chipmaker issued a weak fourth-quarter outlook that overshadowed a better-than-expected third quarter, blaming near-term headwinds across the PC industry. Intel shares dropped about 25% before the bell. Intel also disclosed that a factory explosion in Israel shut a plant for about two weeks and will cost roughly $600 million in lost revenue over two quarters, according to Reuters.

Amazon added a second worry. Its shares fell about 7% after it missed expectations on the top and bottom lines and reported a worrying decline in free cash flow amid massive AI spending. Coming a day after Alphabet fell about 13% in Thursday's regular session on its own earnings miss and negative cash flow, investors are now questioning the whole AI spending chain at once — the companies writing the checks and the chipmakers cashing them.

As Rosenblatt Securities trader Michael James put it in comments reported by Reuters, the after-hours semiconductor weakness was primarily a function of Intel's guidance and negative sentiment spillover. In other words, traders sold first and asked questions later — even though Intel's problems sit mainly in PCs, not in the AI accelerators that drive AMD, Nvidia and Marvell.

Key facts

How far have chip stocks fallen? The Philadelphia Semiconductor Index (SOX) has declined 13% since its recent October high and is off 21% from its all-time high in June, according to Reuters — even though it is still up more than 60% in 2026 on AI-driven shortages and pricing power.

What about AMD specifically? AMD fell 7.5% in overnight trading before deepening to about 9% premarket, according to TipRanks and Investopedia. TipRanks noted AMD's recent Anthropic agreement could involve tens of billions of dollars of computing infrastructure, but the deal also requires AMD to invest up to $5 billion in Anthropic itself — a supplier financing its own customer, which is exactly the kind of circular spending investors are now scrutinizing.

Why is Marvell falling harder? Marvell sank another 5.5% overnight after tumbling 13.5% during Thursday's regular session. Alongside the sector selloff, reported — but unconfirmed — talks to acquire Lumentum, recently valued near $83 billion, have raised fears of a large, dilutive share issuance. Neither company has confirmed an agreement.

Are analysts giving up? No. TipRanks reported that AMD, Nvidia and Marvell all retain Strong Buy consensus ratings, with average price targets implying roughly 17% upside for AMD, 51% for Nvidia and 62% for Marvell from Thursday's close. That gap between analyst targets and Friday's selling is the central tension in the story.

What's next

Friday's regular session will show whether the premarket losses hold, deepen, or snap back once full liquidity returns — premarket moves often exaggerate reactions to a rival's news. The bigger question hanging over the sector is whether the next round of AI earnings can show returns keeping pace with spending. Until then, every weak outlook from a big spender or a legacy chipmaker is landing on a sector that, even after a 21% fall from its June peak, has still risen more than 60% this year. This article reports what happened and why markets reacted; it is not a recommendation to buy, sell or hold any security.

FAQ

Why did chip stocks fall on October 30, 2026?
Chip stocks fell after Intel issued a weak outlook on PC headwinds and Amazon missed earnings while its free cash flow fell amid heavy AI spending, reviving doubts about AI returns across the sector.

How much did AMD, Nvidia and Marvell fall?
Before Friday's open, AMD tumbled about 9%, Micron and Marvell dropped about 6%, Nvidia and Broadcom fell more than 3%, and the SOXX semiconductor ETF was down more than 6%.

What did Intel say about its factory in Israel?
Intel said a factory explosion shut the plant for about two weeks and will cost roughly $600 million in lost revenue over two quarters.

How far is the semiconductor index from its peak?
The SOX index is down 13% since its recent October high and 21% below its June all-time high, though it remains up more than 60% in 2026.