Technology stocks continue to lose blood! Intel plunged 26% in early trading, TSMC ADR fell 2%

The sell-off in technology stocks continues.

After the financial reports of technology giants such as Amazon and Intel showed that the rush to build artificial intelligence (AI) infrastructure not only overwhelmed the technology industry, but also impacted consumers, Wall Street's doubts about AI spending intensified, triggering a sell-off in technology stocks. Following the sharp decline in Asian stocks, U.S. stocks opened lower on the 30th. Nasdaq, dominated by technology stocks, fell more than 2%, Intel fell 26%, Amazon fell 5%, Philadelphia Semiconductor also fell 5.5%, and TSMC ADR fell nearly 3.5%.

The Bloomberg Asian Chip Manufacturers Index fell as much as 4.8% on the 30th. Among them, South Korea's SK Hynix and Japan's Avand Test fell the most, falling more than 9% during the session. The index fell 13% this month. Korea's Composite Stock Price Index (Kospi) closed down 3.5%, down more than 16% for the month, and the Nikkei fell more than 2% on the 225, down 5.2% for the month.

China's blue-chip CSI 300 closed down 1.4% and has fallen 8.5% this month, its biggest monthly decline in more than a decade. It has fallen 15% in the past 12 weeks, its longest losing streak on record.

Anna Wu, founder and investment strategist of Floodlines Research, pointed out, "This financial reporting season is very difficult for AI-related companies. Most companies have been hit by the double blow of AI bubble and inflation concerns; higher financing costs and credit risks may eventually force hyperscale data centers to slow down the pace of expansion."

Tim Waterer, chief market analyst at KMC Trading, said, "AI skepticism continues to be the theme of Asian technology and chip stocks. The trend of Asian chip stocks reflects the market's continued concern about whether current AI spending can be realized at the speed investors hope."

Amazon's huge capital loss highlights the sudden increase in data center expenditures. Its financial report on the 29th showed that last quarter's revenue was US$201.9 billion and net profit was US$20.7 billion, both lower than analysts' expectations. However, free cash flow fell sharply over the past year, turning negative with a net outflow of $42.4 billion.

Alphabet, Google's parent company, increased its AI capital expenditures to more than US$50 billion last quarter, and its cash flow deteriorated to negative US$9.1 billion, much higher than expected. Google's stock price plummeted 13% on the 29th, setting a record for its largest single-day decline in history. Its market value evaporated by US$500 billion, which is second only to Huida's US$593 billion plunge in January last year.

Intel's financial report on the 29th pointed out that due to soaring memory prices, PC sales have been weak, and this pressure will continue until the first half of 2028. Furthermore, a fatal explosion occurred at Intel's Israeli factory this month, which is expected to reduce revenue by approximately US$600 million in the next two quarters.