Intel, AMD Stocks Slump Amid Rotating Funds into Big Tech

Chip stocks stumbled on Wednesday as investors booked profits and rotated funds into Big Tech names. The iShares Semiconductor ETF (SOXX) fell 2% after surging 5.5% on Tuesday, its biggest one-day gain in over a month. Intel stock led the declines, dropping 2.7%, while Advanced Micro Devices and Nvidia stocks declined by 1.8% and 0.9%, respectively.

The semiconductor sector has been under pressure lately due to concerns that low-cost Chinese AI models could diminish demand for cloud services and, by extension, chips. This month, China's Moonshot AI released Kimi K3, an open-source model that its maker claims matches leading closed U.S. models despite being developed with far fewer financial and computing resources.

Investors are now looking forward to Intel's quarterly report on Thursday, which is expected to show a 12% increase in revenue to $14.45 billion and adjusted income of $0.22 per share compared to a loss of $0.10 per share last year.