Wall Street on Monday largely brushed aside last week’s technological damage. Stockpiles of shavings continued to track mud into the house.
About 7 in 10 stocks in the S&P 500 rose Monday, but almost all chip stocks fell and the group lost more than $400 billion in market value in a single session, according to Yahoo Finance calculations.
Intel (INTC) once again led the way lower.
59.97 -5.79 (-8.80%)
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The chipmaker slipped about 9% after its worst day since 1974 on Oct. 30, when a disappointing forecast sent the stock down nearly 29%. As of Monday’s close, Intel was worth less than half of what it was worth at the end of September.
And the damage wasn’t limited to Intel.
Micron (MU), Sandisk (SNDK), Seagate (STX) and Western Digital (WDC) – the memory and storage names that led this year’s chip boom – were all crushed, falling around 6-8%. Marvell (MRVL) fell even harder, a drop that came when it agreed to buy Lumentum (LITE) in a $115 billion deal. Nvidia (NVDA) has held up better than most, but it’s still down about 16% since October 6.
Zoom out and the mess gets bigger. Chip and memory stocks have lost about $3.7 trillion in market value since Oct. 6, according to Yahoo Finance calculations. Nvidia lost the most in dollar terms, but Intel’s nearly halving drop was the steepest among the giants.
Not everything AI related bled. SpaceX (SPCX) rose, although it remains well below its early October level. Software was mixed, except for cybersecurity stocks like Fortinet (FTNT) and CrowdStrike (CRWD), which fell along with chips.
Adam Johnson, founder of Bullseye Brief and portfolio manager of the American Ingenuity Fund, believes last week’s selloff is already anticipating the worst.
“The market sank it,” Johnson told Yahoo Finance on Monday. “They’ve ruled out anything that could go wrong. And when you do that, that’s usually where you see a bottom.”
John Chambers, founder and CEO of JC2 Ventures and former CEO of Cisco, expects the gap between winners and losers to continue to widen.
“There will be major train wrecks,” Chambers told Yahoo Finance also on Monday. “And a rising tide doesn’t lift all boats. I wouldn’t bet against Nvidia.”
Stock Trader’s Almanac editor Jeff Hirsch, who coined the term “Octoberphobia,” bought the sale on October 30. History is on his side. Chips have risen in all eight medium-term cycles since 1994, measured from last October’s close through the following June, according to Yahoo Finance calculations. But in 2002 and 2018, they initially fell by around 11%.
Next is AMD (AMD), which reports its third-quarter results Tuesday after the bell, the same day as the midterm vote.
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