Weak quarter for Intel sends shivers through cooling chip stocks

Intel's disappointing quarterly earnings sent shockwaves through chip stocks on Thursday, spurring a decline in post-close trading. The semiconductor index suffered as Intel blamed near-term headwinds in the PC industry, causing its shares to plummet 18 percent in the after-hours session. This followed Alphabet's earnings report, which caused the SOX to drop 1.4 percent during regular trading hours.

Intel also announced a $600 million loss in revenue due to a factory explosion in Israel that had been shut down for two weeks. Other chip stocks, including AMD and Broadcom, followed the trend downward, with AMD dropping 4 percent and Broadcom falling 2 percent. Despite the negative sentiment, investors were quick to react, with specialized ETFs like the Direxion Daily Semiconductor Bull ETF plummeting 9 percent.

Google parent Alphabet also suffered a 13 percent drop, highlighting the importance of earnings reports. While the SOX has been a standout performer, its momentum has been tested by tighter financing terms, leading to pressure on some AI infrastructure firms. However, analysts believe the post-market trading may be overreacting to Intel's news, which is more related to PC sector issues rather than AI.