What's driving Intel, AMD stocks down 'again' on Thursday?

Intel (INTC) and Advance Micro Devices AMD shares are under immense pressure on Thursday morning amidst what can be described as a “perfect storm”.

A mix of global semiconductor panic, a significant shift in how Wall Street is viewing the AI boom, and painful company-specific realities (for INTC in particular) are hurting the chip names today.

Despite sell-off, however, both AMD and Intel stocks remain blockbuster investments for 2026 – currently trading at well over 2x their prices at the start of this year.

Intel, AMD shares sink on SK Hynix, ASML effect

Intel, AMD, and the broader semiconductor sector is bleeding on July 16 due to two major global catalysts.

South Korean memory giant SK Hynix suffered a “historic” single-session collapse (its worst ever) after reports surfaced that its high-bandwidth memory (HBM) average selling prices are growing slower-than-expected.

This sent shockwaves through the global supply chain. Moreover, while equipment giant ASML recently reported massive backlog, the market has suddenly inverted its thinking.

Instead of viewing this as a sign of booming demand, investors are worried that chip manufacturing capacity is being built out too fast.

The core anxiety has shifted from “Can they build enough chips?” to “Is the massive capex on AI hardware actually sustainable?”

For Intel and AMD stock, this overcapacity threat points to a steep collapse in pricing power and a severe margin squeeze just as their expensive, next-gen hardware architectures are launching.

Company-specific concerns are weighing on INTC stock

INTC shares are taking a harder hit than most chip stocks at writing because the firm’s ambitious turnaround story is hitting major speed bumps.

The bull case for Intel in 2026 relies primarily on its cutting-edge 18A manufacturing process.

But recent reports indicating that profitable yields for 18A are being pushed back to late 2026 or even 2027 are severely deflating investor optimism.

Adding fuel to the fire today, JPMorgan named Intel a top short idea.

The bank said that Intel’s massive year-to-date rally priced in a foundry and artificial intelligence recovery that simply isn’t showing up in concrete financial results yet.

To make matters worse, AMD recently surpassed INTC in quarterly data-center revenue for the first time ($5.8 billion vs. $5.1 billion), showing that Intel is actively losing ground in its most profitable business segment.

The “Great Rotation” out of AI hardware

After massive gains in the first half of 2026, institutional investors are aggressively taking profits.

There is a visible market rotation underway: funds are pulling capital out of high-beta chip names (like Marvell, Intel, and AMD) and parking it in mega-cap tech giants (like Apple and Google) and Chinese tech names (like Alibaba) that actually spend the AI cash rather than build the hardware.

This isn’t a sign that AI demand is dead.

It’s a valuation and positioning correction. Because both INTC and AMD shares were “priced for perfection”, any sign of friction – whether delayed node or a macro capacity concerns – was bound to trigger a sharp exit.