Investors would now turn to quarterly reports from Amazon and Intel, due after markets close on Thursday, for cues.
- Micron and Intel shares dropped over 3% in overnight trading ahead of Thursday.
- Samsung’s net profit for last quarter missed analysts’ target.
- Microsoft and Alphabet spent less than expected last quarter – seen as a warning sign for AI infrastructure companies.
Major chip stocks fell in overnight trading ahead of Thursday after Korean tech giant Samsung missed profit estimates despite record results, and Microsoft and Alphabet spent less than expected last quarter.
Micron (MU) declined 3.4%, tracking a similar drop in Samsung’s stock in Seoul on Thursday.
Intel (INTC) dropped 3.3%, while Broadcom (AVGO) and Advanced Micro Devices (AMD) fell about 2.8% each. The iShares Semiconductor ETF (SOXX) declined 2.5%. Intel is scheduled to report its quarterly results after U.S. markets close on Thursday, along with Amazon (AMZN).
Samsung’s net profit jumped more than six times to 75.136 trillion won in the September quarter. However, the figure missed FactSet’s analyst target of 86.13 trillion won. Revenue more than doubled to a record 195.253 trillion won, topping estimates.
Big Tech results from Wednesday also added to the pressure. Microsoft spent $45.2 billion in capital expenditures last quarter, below the $50.7 billion estimate cited by StreetAccount in a CNBC report and its own $50 billion target.
Alphabet reported $51.36 billion in expenditures, while analysts expected $55.09 billion. The lower-than-expected spending is seen as a negative for AI infrastructure companies.
Investors Shift Focus To Intel, Amazon Results
The selloff in chip stocks comes amid a volatile few months. SOXX fell sharply in October, before recovering this week through Wednesday.
Investors will now look to Intel and Amazon’s quarterly results for further cues. Analysts expect Intel’s third-quarter revenue to rise 21% to $16.48 billion, the fastest growth rate since Q1 2020, per Koyfin. Adjusted profit is seen rising 73% to $0.40 per share.
Amazon’s revenue is expected to rise 12.3% to $202.26 billion, and adjusted profit to rise 2% to $1.99 per share. Investors will closely watch Amazon Web Services, especially after Microsoft Azure and Google Cloud grew better than expected.
Retail View On Chip Stocks, AMZN
On Stocktwits, the retail sentiment was ‘bullish’ for INTC and AVGO, ‘neutral’ for AMD and AMZN, and ‘bearish’ for MU.
“$MU gap fill at 935, then back up we go to 1000+,” a trader said, forecasting a bounce back.
Another wrote: “$MU Nice dip to size into! Long MU for the win. This has been consolidating for 5 months now, the price is the same as it was going back to May 29th which was before the most recent 2 quarters of earnings, 2 excellent earnings beats and guidance raises in a row. Going to probably see 200B+ in net profits in 2027. Follow the money. The DRAM theme timeline is not over, it’s only half way there at most.”
Traders were broadly bullish ahead of Intel’s report. “$INTC about to pump tomorrow! MSFT mentioned they will spend more on CPUs,” said one.
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