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# Chip stocks slump 5.6%, lowest since July 29, on AI spending fears
- URL: https://bullquill.com/chip-stocks-slump-semiconductor-index-ai-costs/
- Published: 2026-10-22T18:14:29.000Z
- Updated: 2026-10-24T07:08:51.000Z
- Description: The Philadelphia SE Semiconductor Index fell 5.6% to its lowest since July 29 on October 22, led by Lam Research, AMD, Intel and Marvell, as Meta's new non-voting shares and Tesla's capex cut prompted investors to reassess AI infrastructure spending.
- Author: Rowan Ashby
- Tags: Markets, Trending, Philadelphia Semiconductor Index, Nvidia, Meta, Tesla, Nasdaq, #lang-en, #tr-chip-stocks-slump-semiconductor-index-ai-costs

## Key takeaways

- Chip stocks slumped on Thursday, October 22, 2026\. The Philadelphia SE Semiconductor Index (SOX) was down 5.6% at its lowest since July 29, according to Reuters (data as of 15:58 UTC).
- Reuters said the chip index was on track to lose more than $616 billion in market value. The Nasdaq-100 was set to erase nearly $1 trillion.
- Chip-equipment makers and AI-exposed names fell hardest. Lam Research, AMD, Intel and Marvell all posted declines of 7% or more during the session, while Nvidia fell less sharply.
- The selloff followed earnings from Meta and Tesla. Meta announced a new class of non-voting shares and narrowed its 2026 spending outlook, while Tesla cut its 2026 capital spending forecast. Analysts said investors were reassessing AI infrastructure spending.
- All figures are intraday. Closing levels were not available when this article was written.

## Why are chip stocks falling today?

Chip stocks slumped on Thursday, October 22, 2026, with the Philadelphia SE Semiconductor Index down 5.6% at its lowest since July 29, Reuters reported. Analysts said investors were reassessing AI infrastructure spending after earnings from Meta and Tesla.

By 11:58 a.m. New York time (15:58 UTC), the Philadelphia SE Semiconductor Index was down 5.6%. That put it at its lowest level since July 29, Reuters reported. The Nasdaq Composite was down 2.06% at 26,152.90 at the same time, and the S&P 500 was down 1.10% at 7,671.90\. The Dow Jones Industrial Average was almost unchanged.

The fall came one day after a strong session for chips. Nasdaq's index data shows the SOX closed at 11,534.82 on Wednesday, October 21, up 2.22%.

"Investors are now reassessing the pace of AI spending and the returns that spending can generate," Steve Sosnick, chief market analyst at Interactive Brokers, told Reuters. He added that semiconductors and the Nasdaq had been lifted "to a huge degree" by investors rushing to take part in the AI build-out.

## Which chipmakers led the drop?

The heaviest losses were in companies tied to building AI data centres and the tools used to make advanced chips. Moves were reported at different times of the session, so the table shows each figure with its time and source.

| Company / index                           | Reported move                | Time (UTC, Oct 22) | Source        |
| ----------------------------------------- | ---------------------------- | ------------------ | ------------- |
| Philadelphia SE Semiconductor Index (SOX) | \-5.6%, lowest since July 29 | 15:58              | Reuters       |
| iShares Semiconductor ETF (SOXX)          | \-6%                         | about 15:45        | 24/7 Wall St  |
| Advanced Micro Devices (AMD)              | \-8%, to $509.79             | about 15:45        | 24/7 Wall St  |
| Marvell Technology                        | \-8%, to $224.64             | about 15:45        | 24/7 Wall St  |
| Intel                                     | \-7%, to $86.64              | about 15:45        | 24/7 Wall St  |
| Lam Research                              | about -9%                    | 13:25 (premarket)  | Yahoo Finance |
| Applied Materials                         | about -6%                    | 13:25 (premarket)  | Yahoo Finance |
| KLA                                       | about -6%                    | 13:25 (premarket)  | Yahoo Finance |
| Nvidia                                    | more than -3%                | 15:58              | Reuters       |
| Nasdaq Composite                          | \-2.06%, to 26,152.90        | 15:58              | Reuters       |

Equipment makers had a company-specific trigger on top of the wider AI worries. Lam Research, which sells machines used in chip fabrication, said on its October 21 earnings call that supply constraints had held back its outlook. Chief financial officer Doug Bettinger said the revenue guidance "would have been a bit higher if not for some near-term supply chain constraints," according to a transcript cited by 24/7 Wall St. Chief executive Tim Archer said the whole industry would have to work through similar limits on clean-room space and supply chains in 2027\. He also said he expects the industry to catch up quickly.

Nvidia, the largest AI chip supplier, fell less than many of its peers. Investing.com reported a separate source of unease for the group: Seoul's Maeil Business Newspaper reported that Nvidia and Tesla plan to invest $2.8 billion in Samsung Electro-Mechanics to build chip substrate factories. That report revived worries about "circular" deals, in which suppliers fund partners that then buy their products. Neither company had confirmed the report in the sources reviewed for this article. By Oct. 22, Nvidia shares were in a correction, 11.3% below their Oct. 6 record, as our [Nvidia stock correction](https://bullquill.com/nvidia-stock-correction-ai-spending-worries/) report shows.

## What did Meta's earnings signal about AI spending?

Meta Platforms reported third-quarter results after the market closed on October 21\. Revenue rose 26% from a year earlier to $64.60 billion, and the company forecast fourth-quarter revenue of $73 billion to $76 billion, according to its earnings release. Reuters reported that both figures beat expectations, yet Meta's shares fell 5.2% by midday on Thursday.

Two details drew investors' attention:

- **Spending.** Meta's capital expenditures, including finance lease payments, were $34.91 billion in the quarter. It now expects 2026 capital spending of $135 billion to $145 billion, narrowed from its prior range of $130 billion to $145 billion. That raises the low end of the range. Meta did not give a full-year 2027 revenue outlook.
- **A new share class.** Meta's board approved a publicly listed, non-voting Class C common stock, with the charter change expected to take effect on January 19, 2027\. Each Class A and Class B share will receive one Class C share as a one-time dividend. Meta says the dividend does not change anyone's voting power, and that it expects the Class A price to reflect a two-for-one split afterwards. Meta said the new class gives it capacity for capital raising, employee pay, possible acquisitions and general corporate purposes.

Reuters described the non-voting shares as a way to help fund Meta's costly AI expansion. For chip investors, the takeaway was mixed. Meta is still spending heavily on the data centres that buy Nvidia and AMD processors, but it is now preparing new ways to finance that spending. That raises the question of how long the outlays can keep growing. Our earlier report covers [Meta's non-voting share class and AI spending plans](https://bullquill.com/meta-non-voting-share-class-ai-spending/) in more detail.

## What did Tesla's capex cut signal?

Tesla also reported on October 21 and lowered its 2026 capital expenditure forecast to about $20 billion, from more than $25 billion earlier in the year, according to several earnings reports including Yahoo Finance. Its third-quarter adjusted earnings of $0.48 a share beat analysts' estimate of $0.44, while revenue of $28.05 billion was slightly below the $28.13 billion consensus, Yahoo Finance reported, citing Bloomberg data.

Reuters said the capex cut raised questions about the pace of Tesla's AI and robotics plans, and the stock was down 0.7% at midday. Yahoo Finance noted that investors were weighing the lower 2026 spending against higher planned outlays in 2027 and 2028 for the Optimus robot, the Cybercab and Tesla's chip fabrication project. A lower 2026 figure means fewer near-term orders for AI computing hardware than the market had previously priced in. Our [Tesla third-quarter results report](https://bullquill.com/tesla-q3-2026-results-capex-cut/) breaks down the numbers.

## How does this fit October's AI-cost selloffs?

Thursday's fall was not the first sign of strain this month. On October 14, shares of AI cloud provider CoreWeave fell about 16% as yields on its bonds climbed, according to market reports. Those reports said the moves reflected fears that companies are borrowing heavily to fund AI data centres. Oracle and other data-centre names also fell that day, the same reports said.

Investor money has kept flowing into the sector despite these setbacks. Bloomberg senior ETF analyst Eric Balchunas said on Thursday that semiconductor ETFs had drawn record inflows over the past week, Yahoo Finance reported. Chip stocks had also gained in the session before Thursday's fall. That pattern helps explain why the drop was so sharp: a lot of new money was positioned for further AI-driven gains, and earnings that raised questions about spending caught it off guard.

The wider market was not uniformly weak. Reuters reported that consumer staples rose 2.5%, led by Procter & Gamble, and that the 10-year Treasury yield fell to about 5.0% as some investors sought safety. That rotation points to a reassessment of the AI trade rather than a broad flight from equities. See the [US stocks daily brief for October 21](https://bullquill.com/us-stocks-daily-brief-2026-10-21/) for the session before the drop.

## What it means

Thursday's chip slide shows how tightly semiconductor valuations are tied to the spending plans of a few very large buyers. When Meta, which spends more than $100 billion a year on infrastructure, sets up a new route to raise capital, and Tesla trims its near-term budget, investors start asking whether AI hardware demand can keep growing at its recent pace.

Several points remain open:

- **Spending versus returns.** Meta's 2026 outlook still implies record spending, so demand has not collapsed. The question analysts are raising is whether the returns from that spending will justify continued growth in 2027.
- **Supply limits.** Lam Research's comments suggest some chip-equipment growth is being held back by supply and clean-room capacity, not by weak orders. That is a different problem from falling demand.
- **Financing.** New share classes, bond-funded data centres and reported cross-investments between suppliers and customers are drawing closer scrutiny.
- **Next catalysts.** Reuters said falling weekly jobless claims supported expectations that the Federal Reserve will hold rates at its meeting next week. More large-cap tech earnings are also due. How the AI hardware supply chain works is explained in our guide to [Google, Amazon and Nvidia AI chip software](https://bullquill.com/google-torchtpu-amazon-torchneuron-nvidia-cuda-explained/).

Because all figures above are intraday, the final size of the move may differ at the close.

## Frequently asked questions

### Why are chip stocks falling today?

On October 22, 2026, chip stocks fell as investors reassessed the pace of AI infrastructure spending after earnings from Meta and Tesla, according to analysts quoted by Reuters. Lam Research's comments about supply constraints also weighed on chip-equipment makers.

### How much did the Philadelphia Semiconductor Index fall?

Reuters reported the index was down 5.6% at 11:58 a.m. New York time (15:58 UTC) on October 22, 2026, its lowest level since July 29, and on track to lose more than $616 billion in market value. The closing figure may differ.

### What are Meta's new non-voting Class C shares?

Meta's board approved a publicly listed, non-voting Class C stock, to be distributed as a one-time dividend of one Class C share for each Class A and Class B share after a charter change expected on January 19, 2027\. Meta says the class adds capacity for capital raising, employee pay and acquisitions.

### How much did Tesla cut its 2026 capital spending forecast?

Tesla lowered its 2026 capital expenditure forecast to about $20 billion, from more than $25 billion earlier in the year, when it reported third-quarter results on October 21, 2026.

## Sources

- [Reuters via Yahoo Finance: Nasdaq falls over 2% on Meta drag, slide in chip stocks (Oct 22, 2026)](https://finance.yahoo.com/markets/stocks/articles/nasdaq-futures-drop-over-1-093849296.html?ref=bullquill.com)
- [The Korea Times (Reuters): Wall Street sinks as Nasdaq falls over 2% on AI cost worries](https://www.koreatimes.co.kr/world/20261023/wall-street-sinks-as-nasdaq-falls-over-2-on-ai-cost-worries?ref=bullquill.com)
- [Yahoo Finance live: Stock market today, Thursday, October 22](https://finance.yahoo.com/markets/live/stock-market-today-thursday-october-22-dow-sp-500-nasdaq-tesla-meta-112217857.html?ref=bullquill.com)
- [24/7 Wall St via AOL: Chip stocks fall as supply warning deepens AI selloff](https://www.aol.com/articles/chip-stocks-fall-supply-warning-154508000.html?ref=bullquill.com)
- [Investing.com: Why is Advanced Micro Devices stock sliding today?](https://www.investing.com/news/stock-market-news/why-is-advanced-micro-devices-stock-sliding-today-93CH-4966560?ref=bullquill.com)
- [Nasdaq Global Indexes: PHLX Semiconductor (SOX) history](https://indexes.nasdaqomx.com/Index/History/SOX?ref=bullquill.com)
- [Meta: Meta Reports Third Quarter 2026 Results (Oct 21, 2026)](https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Reports-Third-Quarter-2026-Results/default.aspx?ref=bullquill.com)
- [Meta Form 8-K, Exhibit 99.1 (SEC)](https://www.sec.gov/Archives/edgar/data/0001326801/000162828026066700/meta-09302026xexhibit991.htm?ref=bullquill.com)
- [Yahoo Finance: TSLA Q3 earnings beat on auto margin gains, 2026 capex view cut](https://finance.yahoo.com/markets/stocks/articles/tsla-q3-earnings-beat-auto-124200869.html?ref=bullquill.com)
- [Admiral Markets: CoreWeave stock falls as bond yields put AI data-centre debt in the spotlight](https://admiralmarkets.com/education/articles/shares/coreweave-stock-drop-ai-debt?ref=bullquill.com)

This article is for information only and is not investment advice.