Intel and AMD Drop 3% as Rotation Out of AI Chip Stocks Continues; NVIDIA Holds Steady David Moadel Fri, October 16, 2026 at 10:54 AM EDT 5 min read INTC -3.53% NVDA -0.01% AMD -3.46% SOXX -2.07% QQQ -1.11% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Intel (INTC) and AMD each fell 3% as investors rotate out of AI chip stocks, questioning how massive AI infrastructure spending will be financed.
SOXX dropped 2% while QQQ slid under 1%, showing chip stocks are absorbing the steepest losses of the broader AI-driven rotation.
Intel's foundry unit is still running a large operating loss despite CEO Lip-Bu Tan reporting the company's strongest revenue growth in over 15 years.
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A rotation out of AI-linked chip stocks isn't letting up, and two of the biggest names in processors are falling again. Intel (NASDAQ:INTC) stock is down 3% to $92.60 in morning trading. Meanwhile, Advanced Micro Devices (NASDAQ:AMD) stock is down 3% to $544.74, matching the decline in Intel shares.
Chip stocks are falling harder than the rest of large-cap tech. The iShares Semiconductor ETF (NASDAQ:SOXX) is down 2%, a smaller drop than Intel and AMD shares. By comparison, the Invesco QQQ Trust (NASDAQ:QQQ) is down 0.9%, a far softer slide than the chip fund.
NVIDIA (NASDAQ:NVDA) is another AI chip designer and the leader for the group. Its Blackwell Ultra systems and the newly ramping Vera Rubin platform power a Data Center business that sells to many of the same cloud providers Intel and AMD serve. NVIDIA shares are up 0.4% to $218.10, so not every chip stock is down today.
The decline extends a rotation out of AI-linked chip stocks as investors question how AI infrastructure spending gets financed. Server processors from Intel and AMD feed that same expansion, which puts both stocks near the center of the trade.
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Heading into the decline, Intel has improving results. Intel's latest quarterly report posted what CEO Lip-Bu Tan called "our strongest revenue growth in more than fifteen years." That same report showed its foundry business posting a large operating loss, a reminder of how costly its manufacturing push remains.
Data center chips anchor Intel's AI business, with Xeon server processors handling cloud, enterprise and AI infrastructure workloads. Beyond servers, Intel has also demonstrated rack-scale AI systems with SambaNova and Foxconn for inference and agentic AI tasks. Its Client Computing and Physical AI Group adds processors for PCs, edge AI and robotics.
Contract manufacturing is what separates Intel from its biggest rivals. Intel designs chips and is building a contract manufacturing business that requires heavy spending, grounded by process technologies such as Intel 3 and Intel 18A. Rivals AMD and NVIDIA design chips and outsource production, which leaves the cost of building factories to their manufacturing partners.
Spending plans at Intel reflect that commitment. The company is increasing investment in equipment, clean room space and substrates, and it's expanding capacity for Xeon processors built on Intel 3. Washington backs that effort too, with Intel receiving U.S. CHIPS Act funding that supports its domestic production.
AMD built its AI franchise on an outsourced production model. Its Data Center lineup includes EPYC server processors, Instinct accelerators and Helios rack-scale systems, and that division now generates the majority of AMD revenue. Anthropic plans to deploy MI450 Series GPUs in Helios racks, while other large AI customers are scaling Instinct deployments.
Beyond the data center, Ryzen processors lifted AMD client sales, and embedded demand strengthened across several end markets. On the gaming side, AMD's business shrank over the same stretch, leaving the company more dependent on AI and server demand.
Intel's revenue recovery drives the optimistic view, with the company reporting this result: Data center and foundry sales both grew in the latest quarter, while client computing also expanded. Intel's gross margin improved sharply from a year earlier as well, giving the turnaround a stronger financial base.
Foundry spending is the main worry for Intel. Its foundry unit is still running a large operating loss.
Strong AI growth stories at Intel and AMD sit alongside real near-term pressure from the rotation. On balance, Intel brings a recovering business with heavy capital needs, while AMD offers a lighter production model tied closely to AI accelerator demand. Shareholders of these chip stocks, especially INTC, should consider keeping their position sizes modest until the foundry question at Intel settles.
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