Intel, Applied Materials and AMD slide after Samsung earnings spark chip valuation fears

Semiconductor stocks reversed sharply after Samsung Electronics’ latest quarterly report triggered a broader selloff tied to market expectations for AI-driven chip demand and margins. In early U.S. trading, Intel shares were down about 10% to around $110, while Advanced Micro Devices fell about 8% to roughly $508. Equipment maker Applied Materials also dropped about 10%, indicating that the weakness was not limited to chip designers but extended across parts of the supply chain.

The sharp moves capped a strong rebound seen in both Intel and Applied Materials earlier in the week, according to the report. That pattern, rally one day and unwind the next, reflected how investors are trading the semiconductor complex around earnings and recalibrating how much growth is already priced into valuations tied to AI infrastructure.

The immediate trigger was Samsung’s earnings reaction in Asia. Samsung posted preliminary second-quarter operating profit of about $58 billion, described as a 19-fold increase year over year and a beat versus estimates. Even so, Samsung’s own shares fell after results, with the report attributing the negative reaction to profit-taking and a view that the beat, while large, was only modestly ahead of expectations.

The report said the hesitation around Samsung’s results spread into U.S. trading, pulling Intel, AMD, and Applied Materials lower. It framed the selloff as a test of whether semiconductor and AI-adjacent companies can sustain the elevated sales and margin outlooks that investors have already incorporated into current pricing.

Sector and index-linked indicators also turned lower. The report cited declines in the iShares Semiconductor ETF (SOXX) of roughly 6% and noted that the broader market’s strength earlier in the prior session did not prevent the selloff from looking chip-specific. In that framing, the downturn was less about a general market breakdown and more about a reset in expectations for the industry.

Valuation sensitivity was highlighted as part of the selloff narrative. The report pointed to metrics it characterized as “stretched” for both AMD and Applied Materials, including AMD’s price-to-earnings multiple being cited around the low 200s and Applied Materials being associated with guidance-level expectations that are already demanding. The takeaway was that even a strong earnings print from a flagship supplier like Samsung can still lead to downside when investors decide the bar for future quarters is higher than they were willing to pay for.

Beyond individual company moves, the episode underscored how quickly investors can shift from “earnings beat equals momentum” to “earnings beat equals valuation overhang.” For semiconductor stocks, expectations for AI acceleration, manufacturing capacity, and equipment spending are interlinked, and a single supplier’s numbers can become a proxy for the rest of the stack.

What remains unclear from the reports is how much of Intel’s, AMD’s, and Applied Materials’ declines came from company-specific news versus direct contagion from Samsung’s guidance expectations. The articles summarized market action and valuation concerns but did not provide new Intel-specific fundamentals, new AMD-specific product updates, or new Applied Materials contract details in the moments leading to the selloff.