Chip Stocks Slide as Tesla Capex Cut, Lam Results and AI Funding Doubts Weigh on Sector

Intel (INTC) and AMD (AMD) fell roughly 8% on Thursday, Micron (MU) dropped 6.3%, Nvidia (NVDA) lost 4.4% and SanDisk (SNDK) slipped 8.5%, as chip stocks sold off on three pressures. Optical networking names led S&P 500 decliners, with Coherent (COHR) down 12.5% and Lumentum (LITE) off 11.5%. The slide followed Tesla's Wednesday earnings, where the company cut full-year capital spending to $20 billion from $25 billion. CFO Vaibhav Taneja said the move was to "efficiently manage our capital allocation." JPMorgan's Rajat Gupta and StoneX's Mickey Legg said the cut appears to defer rather than eliminate spending, with outlays likely rising in 2027 and 2028. Lam Research (LRCX) fell 11.8% after issuing December-quarter revenue guidance below consensus, citing near-term supply constraints. Meta's (META) disclosure of a new share class and earnings added to concerns over debt- and equity-funded AI spending, Mizuho's Daniel O'Regan said.