Intel Drops 28.6%, Its Worst Day Since 1974
Intel shares fell 28.6% on Friday, the chipmaker's worst drop since 1974. The company gave a profit forecast for the final three months of the year that fell short of analysts' expectations. Chief executive Lip-Bu Tan said the personal-computer industry continues to feel pressure.
The slide came even though Intel reported a stronger profit for the latest quarter than analysts had expected.
A broad tech sell-off
The S&P 500 lost 1.8%, its worst day since June, and finished a third straight losing week. The Nasdaq composite dropped 2.9%, the steepest fall among the main indexes. The Dow Jones Industrial Average gave up 572 points, or 1.1%. The S&P 500 closed at 7,580.07, still only 3.1% below its all-time high.
Nvidia fell 4.2%. That was the heaviest single pull on the S&P 500, outweighing even Intel.
Amazon slipped 1.4% after reporting a weaker summer profit than analysts expected. Investors were also watching its cash flow. Amazon burned through $42.4 billion of free cash over the prior 12 months, and spent $94.8 billion on property and equipment, mostly on artificial-intelligence technology.
A day earlier, Alphabet dropped more than 12%, its worst day on record. It had told investors that it burned through more cash in the summer than in the spring, citing similar AI investments.
Worries are growing over whether hundreds of billions of dollars in AI spending will bring enough profit and productivity. "We're moving out of the hopes and dreams phase of the AI trade and into the 'show me' phase," said Joe Tigay, a portfolio manager at Equity Armor Investments.
Outside of tech
Other sectors held up better. ExxonMobil rose 2.2% and Chevron 1.8% after stronger summer profits than analysts expected. Mondelez International gained 3.9% on stronger-than-expected growth, and Colgate-Palmolive added 2.3%.
Treasury yields eased. The 10-year yield fell to 4.93% from 4.98% the day before.
Source: Fortune