Intel, AMD stocks slide again in aftermath of Broadcom's weak outlook

Shares of Intel Corp. and Advanced Micro Devices extended their declines on Friday as a sharp selloff across semiconductor stocks gathered pace, with investors continuing to react to Broadcom's weaker-than-expected artificial intelligence outlook.

The broad-based retreat came after Broadcom's fiscal second-quarter earnings report, which beat headline expectations but failed to meet the market's lofty hopes for AI-related growth.

The disappointment sparked a second consecutive day of losses for chipmakers that have helped drive US equities to record highs in recent months.

INTC shares fell 8% in trading, touching an intraday low of $101.55, trading at $102.48 at the time of writing.

AMD also declined about 8%, adding to pressure across the semiconductor sector.

Broadcom outlook rattles semiconductor sector

The catalyst for the latest selloff was Broadcom's guidance for third-quarter AI semiconductor revenue of roughly $16 billion, below analyst expectations of approximately $17.2 billion.

The company also declined to raise its full-year AI chip revenue outlook.

Broadcom shares dropped more than 5% on Friday after plunging 13% in the previous session.

According to Dow Jones Market Data, Thursday's decline erased approximately $286 billion in market value, marking the fourth-largest one-day valuation loss ever recorded by a US-listed company.

The weakness quickly spread throughout the semiconductor industry.

Micron Technology, Qualcomm, Arm Holdings, and Marvell Technology also moved lower as investors questioned whether the AI-fueled rally in chip stocks could sustain its momentum.

Broadcom's earnings call also added to investor concerns after Chief Executive Officer Hock Tan said that major custom-chip customer Google was likely to diversify its supply chain.

Intel faces valuation concerns

While the broader sector downturn weighed on Intel, the stock also faced pressure from a recent analyst downgrade.

Northland Capital Markets lowered its rating on Intel to Market Perform from Outperform, with analyst Gus Richard arguing that the stock's nearly 500% rally over the past year had already reflected much of the expected operational recovery.

The analyst also expressed caution that hyperscale data center spending could begin to slow in 2027, creating additional uncertainty for semiconductor demand.

The combination of Broadcom's cautious AI outlook and ongoing valuation concerns left Intel particularly exposed during Friday's risk-off trading session.

AMD hit despite strong long-term momentum

AMD also came under pressure as investors rotated out of high-growth AI names.

Research firm Zacks recently downgraded the stock from "strong buy" to "hold," citing a price-to-earnings ratio of roughly 173 times earnings and a share price that had climbed well above the average analyst target.

Investor sentiment was further weighed down by recent selling activity.

ARK Invest reduced its AMD position 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% for the year, although the stock continues to trade below its recent 52-week high.