Chip Stocks Shed $3.7 Trillion Since October as Nasdaq 100 Slides Into Correction
Chip and memory stocks have lost about $3.7 trillion in market value since Oct. 6, and the rout deepened Monday as the Nasdaq 100 slid into correction territory on the eve of the midterm elections.
The group shed more than $400 billion in a single session even as about 7 in 10 S&P 500 stocks rose, Yahoo Finance calculated. Intel fell about 9%, leaving it worth less than half its value at the end of September.
Memory and storage names that led this year’s chip boom, including Micron, Sandisk, Seagate and Western Digital, fell roughly 6% to 8%. Nvidia held up better but remains about 16% below its Oct. 6 level.
The broader market split, according to CNBC. The Nasdaq Composite fell 1.07% to 25,164.32 and the S&P 500 lost 0.51% to 7,541.40, while the Dow Jones Industrial Average rose 213.67 points, or 0.41%, to 51,983.98.
Old-economy stocks carried the Dow, with Sherwin-Williams up almost 6% and Home Depot up 3.6%. Honeywell, 3M and Boeing each gained more than 2%.
Two deals added to the pressure on tech. Marvell Technology fell almost 13% and Lumentum dropped 18% after Marvell agreed to buy Lumentum in a $115 billion deal.
Oracle slid 8% after saying it plans to sell $10 billion in common stock and another $10 billion in bonds to pay for its artificial intelligence buildout.
Intel’s collapse began Oct. 30, when the company said fourth-quarter revenue would come in $1 billion to $2 billion below analysts’ estimates as soaring memory costs hit the PC market, CNBC reported.
The stock dropped 29% that day, its worst session since the 1970s, capping a 45% plunge in October that was its steepest monthly decline on record.
Selloff Spreads to Asia
The damage carried overseas Tuesday. South Korea’s chip-heavy Kospi slid almost 4%, with Samsung Electronics and SK Hynix each down more than 4%, Bloomberg reported.
A gauge of U.S. chipmakers has now fallen 12% over a three-day rout, and the Nasdaq 100 sits 10% below its peak, the common threshold for a technical correction.
“Markets are mostly in a risk-off mood against the background of increasing AI concerns and the US midterm election,” said Kieran Calder, head of Asia equity research at Union Bancaire Privée.
Calder said the S&P 500 has been higher six months after every midterm election since 1950, but warned that “it could be a rocky week.”
Some investors see a buying opportunity. “The market kitchen-sinked it,” Adam Johnson, portfolio manager of the American Ingenuity Fund, told Yahoo Finance. “They discounted everything that could go wrong. And when you do that, typically that’s when you see a bottom.”
Former Cisco CEO John Chambers was more selective. “There will be major train wrecks,” he told the outlet. “And rising tide does not raise all boats. I would not bet against Nvidia.”
Early Tuesday, Dow futures fell 0.7% and S&P 500 futures slipped 0.2%, while Nasdaq 100 contracts edged just above flat, Yahoo Finance reported.
The Labor Department releases its September job openings report Tuesday morning, with economists expecting about 7.1 million openings. Advanced Micro Devices reports results after the closing bell, offering another read on AI demand as election returns come in.
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