Intel plunges 25%, triggers global chip rout on bleak outlook | Hacker News Reader

Intel plunges 25%, triggers global chip rout on bleak outlook

reuters.com

88 pointstartoran100 comments

Coming from an era when S&P 100 companies having 3% single day stock swings would be front page news what's happening today is hard to comprehend. Intel losing $150B market value, Google $480B, Microsoft $360B earlier this year, SpaceX $400B, Nvidia having several $500B+ swings in either direction... People are barely blinking at trillion-dollar companies gaining or losing a quarter of their value overnight.

To put things in perspective no company was worth $500B total around a decade ago.

As a crypto veteran, I sometimes forget that a 25% swing is newsworthy.

Common circuit breakers are at: 7%, 13%, 20% or 10%, 15%, 20% So a 25% drop, but for entire market, would be very newsworthy. As in: the press would be already trying to choose between calling it black/bloody/Halloween Friday.

Inflation also inflates stock prices.

True. The conventional wisdom that inflation is bad for stocks is not defensible.

Inflation brings higher interest rates, which is bad for stocks.

If your margins remain constant, profit goes up on a nominal basis.

Buy the dip. (Sort of joking?)

Catch a falling knife. (Maybe joking?)

Got it, put all my life savings into guac.

Market is bi-polar lately

Buy Polar stock you say??? I'm dumping my life savings into it right now, hope I'm not too late!

At least one got the pun! Btw, the stock exchange closest to me has POLAR ticker: https://live.euronext.com/en/product/equities/NO0013756361-M...

But is it an indicator of wild swings or how much value the individual dollar paper has lost?

Did the dollar lose 25% value since yesterday?

<< Coming from an era when S&P 100 companies having 3% single day stock swings would be front page news what's happening today is hard to comprehend. Intel losing $150B market value, Google $480B, Microsoft $360B earlier this year, SpaceX $400B, Nvidia having several $500B+ swings in either direction... People are barely blinking at trillion-dollar companies gaining or losing a quarter of their value overnight.

You compared old times to new times. I am simply testing whether it makes sense. Just a bigger absolute number on one day does not change much, and just the 150B example only a decade ago is different from 150B now.

And you seem to know this.. so why offhand response?

edit: 150B clarification

Wibble wobble, teeter totter, boil and froth! Will it pop? Nobody knows!

At the same time, you can't argue that everything in our society has similarly improved. There is still a long way to go in providing more diverse access to the wealth generating markets.

I'm not sure what point you're even making. It has never been easier to access markets. It seems like the core problem is that most Americans don't have/save enough money to get rich from buying them, nor is there specifically any mandated formal education that gives any guidance on investing. I also know plenty of people from my small town America hometown that save their money in regular cash savings accounts, despite them having internet and easy access to put money in a brokerage account with their bank and buy equities.

> People are barely blinking

I speak only for myself, of course — but my eyes are watering.

People are desperately looking for signs here, but I just see Intel returning to historical levels. Intel is still up for the year.

Sure but if the rest of big tech starts returning to "historical levels" the entire economy is in trouble.

Intel also said half of their revenue was consumer sales and projected them to fall 20% soon. Meanwhile, they have limited offerings in the AI department and their gGPU market hasn't really taken a strong hold.

If it keeps going or spreads to other, unrelated businesses (no, I don't count 2-5% adjustments), that's something to notice, but this just seems like people reacting fairly expectedly to the content of the report? To put this in perspective, Intel is still up 68% YoY.

But, as always, we'll see in the coming hours/days.

It's worth remembering that 5 years ago Intel was making close to 100b revenue at over 20% net margin. Whether they can again achieve this (or better) is the question, and depends on how much the total capex costs, how fast they can ramp up production, how long the data center capex spending lasts etc. It's possible their margins will never be that high again if they were the result of irresponsibly milking the business and not reinvesting. Tsmc has much better margins, though that may also not last if it's a result of lack of competition.

The single biggest/best thing Intel could do is get back into memory. Their entire remaining business is now throttled on everyone else being able to supply memory, on top of whatever other competition they were already experiencing.

but would intel have enough capacity to swing the needle?

In theory they have huge manufacturing capacities. But its all for logic, not memory, so its useless.

Thats a different process than logic, so they can't just switch their factories to DRAM production easily.

I'm no economist or investor, but down 28% in a day seems insane for a company at this scale. And they didn't even perform badly, imagine what would happen if they missed their earnings projections.

Intel is still up 75%+ YTD.

It's 66% now. But that only makes my point stronger - why is a shovel-selling company that has been doing so well (at least as far as finance is concerned) having a one-day wipeout like this on relatively mundane news?

The company at the bottleneck makes the most money. This is memory right now. Intel sales are limited by memory output.

Might be another hedge fund that went full-on AI (see Situational Awareness) is not doing great and is trying to liquidate their inventory.

(next day: 56% ...)

The stock market isn’t based on reason anymore, it’s vibes. That’s why you see huge swings and nobody bats an eye. It’s just a game.

This is why i am not going to invest into the sp500 etfs that everyone is suggesting. The US tech company share prices just don't have any logic attached to them. Huge swings are normal, so.. how can you reason about such thing?

They were crazy overvalued. In August 2025, they were trading below $20 (which was crazy undervalued). When things were going great for them in the past, they were in the mid 60's.

Trump strong armed some companies to make deals with Intel, and the market went crazy - taking it all the way up to $120. But performancewise, all their gains have been incremental. I know many who work there, and nothing has changed from a year ago - other than the infusion of cash from the deals. The products are still behind AMD and Nvidia. The fab is losing money at almost the same rate that caused their stock to drop from $50 to 25 some years ago ($8B loss then - likely still over $7B this year). Revenue has gone up incrementally, and is still way down from the peak some years ago.

To give you an idea, they had reduced their ESPP offering to no lookback period - to save money. Employees get a fixed 15% discount - that's it. Their LLM budget is about $10/day ($200/month) per employee. The layoffs started by Lip-Bu Tan never ended. It's just become continual. They are trying to find any possible way to save money. That hasn't changed.

Their current price at $64 is, at best, a fair price, and likely still a bit overvalued.

Can anyone give an explanation in layman's terms for those of us finance/economic illiterate why this is happening?

The demand for compute for AI is increasing, why would a compute producer lose value?

Intel really doesn't have a great product range for AI, at least compared to NVIDIA and AMD.

Their server CPUs are quite competitive and relevant for agentic stuff, but AMD CPUs are arguably better and every hyperscaler (and NVIDIA) has their own ARM based CPU nowadays.

On the GPU/AI accelerator side, they have basically nothing. Gaudi is dead, all the Ponte * accelerators are heavily delayed, Xe based GPUs are not competitive.

On client (think gaming and office PCs), memory has gotten so expensive that nobody buys new machines right now.

I doubt it'll be enough to carry the company but I really hope Crescent Lake works well for them. A 120-480GB bigger Xe3p GPU is not going to be a speed demon but hopefully gives Strix Halo and Mac M5 Ultra a very good run for the money.

Again, not going to be "the" product to turn things around. But a very smart offering that no one else is doing, if they can price it ok. Which is barely in their control, given that it's once again overwhelmingly ram (by cost share).

Such a pity. Panther Lake and Wildcat are both really excellent chips. What a bad run of timing for an Intel that finally seems arising.

IMO all bets are off and nothing is going to make sense until after the elections and we know whether bombing returns to Iran or not. I wouldn’t make any moves until December, you may get lucky getting in/out of some positions but you most likely will not.

As for a cause, I read an article this morning about some kind of capex miss for Google, MSoft, Amazon and some AI revenue miss at ServiceNow and the analyst has declared the bubble pop underway. _Don’t read too much into that though_, analysts makes this claim and the inverse every single week.

Overhype, believing Intel is like the 486/Pentium Intel era with new AI boom. Think of it like dutch tulip mania, Netscape-Internet-Petdotcom mania or the recent 2008 CDO housing mania ... but chip mania that do AI. People realized that maybe AI is overglorified for now and any money they can make will still be decades away.

For the same reason that during the era of x86 dominance all x86 competitors were not valued as highly as Intel.

Seems that most articles agree that if you look at just the fundamentals, the only thing that was bad that Intel reported was that they're promising less profit next quarter than expected. Despite their server division booming, the PC crisis is holding them back a bit. But I don't know if this is a reason why it would drop this much, maybe companies are using this to price in them vastly overestimating Intel earlier this year or fears about the future of its AI division.

They also had guidance of negative cash flow for 2027. This is not what people like to hear. This is the same as Gelsinger betting the farm on 18a/foundry/etc. I think it's the right decision for the business but the numbers were never going to look good.

Intel was at $19 in August 2025 and is $66 today. The company is doing fine. All the swings in between are speculators/gamblers reacting when things don't go their way.

Everyone wants a simple narrative that explains the drop.

Sometimes there isn't one. Answering precisely why the price went down requires understanding the process, mindset, motivations, fears, and finances of every buyer and every seller everywhere. To this date, there is no consensus on the causes of the crashes of 1929, 1973-74, 1987, 2000-2002, and 2007-2008, although there's no shortage of simple narratives claiming to explain the causes.

Seemingly small changes in the behavior of buyers and sellers can have a disproportionate impact on market capitalization, because share prices are set at the margin by the last trade executed, between a particular buyer and a particular seller. Billions of shares of a stock could trade hands at $100/share, but if one share then trades hands at $1/share, the company's market capitalization at that moment is 99% lower, even though only one dollar changed hands. This sort of thing was in fact seen during the great crash of 1929, when there were occasionally no normal bids for some stocks, and tiny orders to buy them for less than $1/share suddenly were filled, temporarily sending market caps to near zero.

EDIT: I made many changes to this comment so it better reflects what I meant to write the first time around.

This isn’t one trader buying INTL at a 29% discount. But thanks, Claude(?) for the explainer of the basics of markets, I guess.

Not Claude! I'm a person :-)

Everyone wants a simple narrative that explains the drop and fits in their head. Sometimes there isn't one.

Who are the buyers and sellers of the stock? How have their process, mindset, motivations, fears changed?

I don't think it's easy to answer those questions.

I edited my comment so it better conveys my thoughts.

Oh, I get you. Why today? Why so much? Having traded stocks for many decades, my observation is that sometimes today is the day for something that’s been coming for a while and is an accumulation of reasons.

Or IOW, we all want a “it’s because of this one thing…”, and sometimes it is, but especially in this case it’s probably been coming for a multitude of complex reasons. Doesn’t matter, INTL is down, deal with reality and move in. Knowing why won’t fix your portfolio. :-)

Yes.

It's more than that, though. Anecdotally, in my experience, many smart people who own stocks but are not traders haven't given much thought to how these markets work.

What are you trying to say exactly? Yes share prices are set by buyers and sellers (aka the market). This isn't a great revelation you are trying to make it to be.

Thanks for the question!

I edited my comment to convey more clearly what I meant:

Sometimes, simple narratives cannot truly explain these events.

2000-2002 is consensus is explained pretty well...

https://en.wikipedia.org/wiki/Dot-com_bubble

Interestingly, lots of parallels to current times.

Sure, dot-com valuations were high in 2000... but smart people were getting concerned about dot-com valuations as far back as the mid-1990's. Alan Greenspan, head of the Fed, was publicly raising concerns about "irrational exuberance" in 1996. And yet, valuations kept getting sillier for another half a decade. Why did the bubble end in 2000? Why not earlier, or later? Why was it a crash, instead of a slow decline? Why did everything suddenly change, seemingly all at once? There's no consensus on the causes of those sudden market movements.

Otherwise, I agree there quite a few parallels with the present.

The reason is detailed in the article. Fed increased rates in a very short amount of time and people fled the stock market for the safer interest rates...

"At the same time, a decline in interest rates increased the availability of capital.[20] The Taxpayer Relief Act of 1997, which lowered the top marginal capital gains tax in the United States, also made people more willing to make more speculative investments." ... "Meanwhile, Alan Greenspan, then Chair of the Federal Reserve, raised interest rates several times; these actions were believed by many[weasel words] to have caused the bursting of the dot-com bubble."

Those weasel words you highlight, "believed by many," betray that there is no consensus on the precipitating factors.

FYI, the Fed raised rates by more in the early to mid-1990's than in the late 1990's: https://fred.stlouisfed.org/series/FEDFUNDS

The precipitating cause wasn't valuation or rates. It was a seemingly sudden change in the mindset, motivations, fears, finances, decisions, and behavior of stock buyers and sellers.

Do more research. I'm just pointing to one source for brevity of discussion, there are others.

The problem was how quickly rates went up (not necessarily how much they went up). It was like 5-6 times in 6 months, which spooked everyone. It peaked in 2000, then the unprofitable companies ran out of money when investors pulled out of the stock market, then rates went back down.

> which spooked everyone

> when investors pulled out

Nothing spooked them before then, not even the head of the Fed warning about "irrational exuberance" on the front page of every newspaper.

There was a change in behavior. It was sudden, and it surprised everyone -- well, maybe not everyone, but many.

I lived through it. It was like day/night in SF. One day it was glorious and the next day it wasn't. It was classic SF group think, and everyone in the bay area was ignoring the "irrational exuberance". Money was flowing, people woke up, then it stopped.

I suspect we will see this again with AI at some point. I've been building my own business around this whole concept of financial failure, not taking on massive debt like everyone else is and running super lean and profitably. It is hurting me in the short term to not have access to capital, but I think it'll all turn around at some point when people wake up, again.

> I lived through it

I figured as much :-) Day-suddenly-night is a pretty good way to describe it.

Maybe it will happen again. I have no idea; maybe with AI it is different this time.

> Everyone wants a simple narrative that explains the drop. Sometimes there isn't one.

And sometimes it is a simple, ominous two-syllable word that contains three Bs.

Can this turmoil be in part because investors wanting to take home some of their profits before the US midterm elections?

is it take profit? or just GTFO before it all hits the fan?

FWIW I am the latter, and sold last week while it was still positive.

it's gonna get real ugly soon...

Why not work as before (on 3D XPoint) with Micron and try to pursue PIM (processing in memory) on DRAM? It doesn't go around the DRAM manufacturing constraint, but it helps them sell new PIM-DRAM coupled to Xeons. Right now, they have "pie in the sky" GPUs and nVidia has their boot on Intel's throat, while Xeons and let alone normal cpus are going down the drain.

Intel needs to innovate under constraints and, if history is to be reinterpreted, this won't end well for them. They need less management and to double-down on engineering and their lithography pipeline.

To put things into perspective: Intel is still up 60+% (both year to date and over the last year), but down 45+% from the recent peak.

Alphabet was -12% yesterday and still in red today, can someone explain what's going on? Why is this happening now?

They had their earnings report yesterday. Same for Intel today.

I know but the earnings were not bad at all? It's confusing

Previously the stock price was based on expectations, and if those expectations were not met the price could be expected to decline to reflect the actual performance.

Investors drop stock after report when earning didn't reach predicted level, but confusing part is that sometimes the results are exactly as predicted (and in theory priced in) but some investors are still disappointed and start the sell-off.

Taking profits at the top

Perhaps large investors are moving towards the distribution part of the cycle. (Longer time scales sure look like it on the index charts.) Time will tell

Good and bad are relative. If I bought stock with the expectation that Google would make $100B in profit and they "only" made $80B then the earnings were bad from my perspective and I'd be inclined to sell my position.

Valuation doesn't come from what's happening now, it comes from what is expected in the future. The whole point is to put in money to make more money later.

The earning report doesn't need to be bad for investors to see the projected outcomes for future quarters and say "hm... my money is best put somewhere else, whose earnings report showed more potential for growth".

search revenue was finally lower than expected.

If it's the beginning of the end, I'm gonna start writing a Lehman Brothers office scene featuring Anthropic.

But with Dario's goofy expressions, gonna be *chef's kiss*

Casting Dario will be a problem tbh

I'm sure Jesse Eisenberg can do it

They are the same age actually. I gotta develop the film. Will keep in mind.

Individual companies crashing while the market as a whole remains stable is the opposite of "the end". This is how things are supposed to work.

Look at the debt market: https://news.ycombinator.com/item?id=50303881

Who owned shares and how many before the Government invested? Who sold shares and gained prior to this plunge?

I would imagine that AI completely wrecking the consumer PC market is finally starting to show in real world value. I think it outpaced whatever other profits Intel was predicting to make.

Not too surprised, Intel was trading at a PE of over 100. Although it looks like their PE has turned negative. Not a great look. Their stock might even continue falling.

Well something is defo coming. Dot com crash 2.0?

I agree that "something" is in the coming. To much hype everywhere. But we still have to wait for the surprise to know "what" is coming.

The ominous sound of IPOs digesting the middle class retail investors savings.

I don't even want to think about all those retirement founds evaporating if things turn sour...

Yep, we have evolved since and are making our bubbles bigger!

Credit Swaps For Tech Companies Reach Records Amid Supply Fears - https://www.bloomberg.com/news/articles/2026-10-29/google-de... - October 29th, 2026

- In the credit derivatives market, the cost of protecting Broadcom Inc.’s debt against default for five years rose by about 10 basis points to 175.4 basis points a year, the highest closing level on record, according to ICE Data Services. The gauge rises as investor worries grow.

- A similar gauge for SpaceX rose about 20 basis points to 266.5 basis points, its highest closing level since it started trading earlier this year. Meanwhile, CDS tied to Alphabet rose by about 5.1 basis points to about 84 basis points, the biggest increase in basis point terms since July.

- Investors are looking to hedge their credit exposure after the Google and YouTube parent posted weaker-than-expected revenue and earnings per share for the third quarter. That includes ad sales, critical for financing Alphabet’s massive AI investments.

- While equity investors could see huge gains if AI investments pay off, debtholders bear the pain if things unravel, said Gavan Nolan, fixed-income-pricing executive director at S&P Global Market Intelligence. Bond investors are laser-focused on capital spending and when AI revenue will be free cash flow positive, he added. “In some way credit is telling a bit of a different story than equities when it comes to the tech sector,” Nolan said in an interview.

Edit:

Nasdaq 100 Falls 2.5% as Earnings Deepen Tech Rout: Markets Wrap - https://www.bloomberg.com/news/articles/2026-10-29/stock-mar... - October 29, 2026 at 5:07 PM CDT, Updated on October 30, 2026 at 9:50 AM CDT

- Another batch of disappointing tech results intensified the industry rout, with traders questioning the payoff from artificial-intelligence investments. The Nasdaq 100 fell 2.5%. Intel Corp. sank 27% as its outlook missed estimates. Amazon.com Inc. dropped 2% amid greater capital spending. The S&P 500 hovered near its 100-day moving average, a key technical level.

- The core businesses of America’s technology giants — the advertising, consumer and retail machines propping up a collective $750 billion in AI spending this year — are starting to show signs of slowing. In some cases, they’re being cannibalized by the very technology the firms are betting the house on.

- That has sharpened scrutiny of both the durability of AI demand and whether the huge sums being poured into the technology will generate sufficient returns. The Nasdaq 100 has already wiped out more than $1.2 trillion in market capitalization in October.

Me and my friend Qwen definitely wouldn't mind to buy some cheap GPUs

"Pacing the frontier" into a great depression. The safety maxxers will be the death of the field.

Have safety maxxers had any effect on model releases? I see no slowdown caused by them.

We had an increasing cadence of releases for frontier models but got nothing in October. Opus 5.5 was released over a month ago and Fable has had no updates in a while, just sneak peeks of what they are achieving internally.

Gemini 4 Argon was released in October. It was a big part of the PHP2Shell story.

Google is catching up, not leading.

There is no one reason for the tech route lately. But there are several causes as I see it:

1) Stocks priced for perfection. This applies mostly to Google that was priced to beat estimates. They did not and alot of people took that to mean Google was incorrectly priced and should have a multiple shift down.

2) worry about capital expenditures. Google was also guilty here as the market is starting to get worried about these companies getting over their skiis on cap ex. Microsoft did guide their capex lower but Google doubled down and said they'd spend even more. The market punished them for that.

to this point MSFT is only slightly down due more to the sector than the company as they did announce capex cuts for next year.

3) Intel just flat out failed to hit targets on their earnings that the market felt it should have been easy to do in this economy. And they got punished for it.

4) Most hedge funds and other large money managers have had decent allocations to the Mag7 and related companies as if you didn't have any tech exposure you would almost certainly outperform in the past 2-3 years.

This year we're starting to see a slow down or resetting of expectations for tech companies, Anthropic and Open AI seeing their IPO valuations get cut down is one large sign of this.

We've seen a large transition of hedge funds out of tech in the past 6 months that really accelerated with this earnings season.

5) Earnings capture. We're nearing the end of the year and alot of long/short funds are just starting to realize gains to lock them in for the year. Tech has had a good run and if you think that its going to get worse into the end of the year, you realize your gains here, or you get the sell side to write you a bespoke option at the price you want to realize your gains at if you don't want to realize it for tax purposes and then they go and sell the stock to hedge, which has the same effect of pushing down the stock as it would as if you just sold None of this is to say that AI or the tech sector is going away. its more of a changing allocation of money out of this sector due to their valuations getting ahead of their economics.

Nice, like in 2000. Back then it was Juniper routers that were overhyped.

Now GPUs are sitting idle or are not even installed:

https://www.hpcwire.com/aiwire/2026/04/21/companies-are-raci...

It was all a big lie and AI bros who ruined a vibrant Silicon Valley economy can all go to hell.

Well duh, they don't have competitive AI accelerators.

More puzzling is the sale of other stocks that actually do.

Reply on news.ycombinator.com