Chip stocks are moving lower in Thursday’s premarket trading, with Nvidia (NASDAQ:NVDA) down about 1.5%, Advanced Micro Devices (NASDAQ:AMD) falling 2.5%, and Intel (NASDAQ:INTC) losing around 3%. The weakness extends throughout the semiconductor sector, with the iShares Semiconductor ETF dropping close to 2% during today’s session.
The pressure on chip stocks comes as rising Treasury yields weigh on the broader tech sector. Stronger U.S. economic data and higher input costs have raised concerns that inflation could remain stubborn, potentially forcing the Federal Reserve to consider raising interest rates again. With the 10-year Treasury yield moving above 5%, investors are facing a higher-rate environment that can make the elevated valuations of tech and semiconductor stocks harder to justify.
Nvidia’s slide comes despite continued evidence that spending on AI infrastructure remains robust. Its latest quarterly report showed revenue reaching $96.2 billion, representing an 18% sequential increase as demand for accelerated computing continued supporting the chipmaker’s expansion.
Meanwhile, Nvidia continues securing massive commitments from some of the biggest names in tech. In August, the chipmaker and Amazon Web Services unveiled plans to deploy another 2 million Nvidia GPUs across AWS infrastructure, while broadening their partnership beyond GPUs to include networking, CPUs, AI models, and robotics.
China represents another important variable that investors will be watching during the coming months. Nvidia’s current quarterly outlook assumes no data-center compute revenue from China, meaning improved access to that market could provide additional sales that management has not incorporated into its existing guidance.
Wall Street is giving Nvidia a rare clean sweep. Each of the 31 analysts who weighed in on NVDA over the past three months recommends buying the stock. That 31-for-31 backing translates into a Strong Buy consensus rating. Meanwhile, the average 12-month price target of $324.32 suggests analysts see ~44% upside for the shares. (See NVDA stock forecast)
AMD’s 2.5% slide follows an especially strong period for the chipmaker’s shares. Earlier this week, AMD crossed the $1 trillion market-cap mark for the first time as investors continued betting that its hardware can capture a larger portion of global AI spending.
Several large agreements have strengthened that case during recent months, particularly among hyperscale customers seeking additional computing capacity. AMD has a multi-year agreement with OpenAI covering deployment of as much as 6 gigawatts of Instinct GPUs, while Oracle has committed to deploying 50,000 MI450 accelerators within its cloud infrastructure.
AMD also rallied earlier this week amid excitement surrounding Meta’s Muse AI assistant. Its early popularity has encouraged investors to consider how wider adoption of AI agents could increase requirements for GPUs and traditional CPUs, giving AMD another potential avenue for growth beyond accelerator sales alone.
Wall Street continues expecting additional gains from AMD after its huge run this year. Among 35 analysts covering the stock, 29 recommend Buy while 6 assign Hold, resulting in a Strong Buy consensus rating. The average 12-month target stands at $644.62, representing about 35% upside from current levels. (See AMD stock forecast)
INTC also jumped about 12% on Monday as investors reconsidered how traditional CPUs could benefit from wider adoption of AI agents. There are already indications that Intel is struggling to satisfy current processor orders from customers. CEO Lip-Bu Tan recently said the company can currently meet only about half of customer CPU demand, pointing toward supply constraints while interest in its processors remains elevated. Meta’s Muse has added another reason for investors to examine whether expanding AI-agent usage could translate into greater CPU requirements throughout data centers.
Wall Street remains much more cautious toward Intel than it is on Nvidia and AMD. Among 32 analysts covering INTC, 7 recommend Buy, 23 assign Hold, and 2 recommend Sell, giving the stock a Hold (i.e., Neutral) consensus rating. The average 12-month price target stands at $117.56, suggesting shares will stay range-bound for the foreseeable future. (See INTC stock forecast)
