Intel's 25% Plunge Sets Off a Global Chip Selloff
Intel plunges 25%, triggers global chip rout on bleak outlook
A bleak outlook from Intel sent its shares down 25% and dragged chip stocks worldwide with it. On Hacker News, commenters wrestled with how routine such swings have become: Intel shed $150B in market value, Google $480B, Microsoft $360B, and Nvidia has swung $500B or more in a single day. Others pushed back, noting Intel is still up for the year and simply back at historical levels, while some pointed to record credit-default swap prices as a sign of deeper strain.
Coming from an era when S&P 100 companies having 3% single day stock swings would be front page news, what's happening today is hard to comprehend.
- paxy
Coming from an era when S&P 100 companies having 3% single day stock swings would be front page news what's happening today is hard to comprehend. Intel losing $150B market value, Google $480B, Microsoft $360B earlier this year, SpaceX $400B, Nvidia having several $500B+ swings in either direction... People are barely blinking at trillion-dollar companies gaining or losing a quarter of their value overnight.
To put things in perspective no company was worth $500B total around a decade ago.
- xnx
People are desperately looking for signs here, but I just see Intel returning to historical levels. Intel is still up for the year.
- fidotron
The single biggest/best thing Intel could do is get back into memory. Their entire remaining business is now throttled on everyone else being able to supply memory, on top of whatever other competition they were already experiencing.
- cs702
Everyone wants a simple narrative that explains the drop.
Sometimes there isn't one. Answering precisely why the price went down requires understanding the process, mindset, motivations, fears, and finances of every buyer and every seller everywhere. To this date, there is no consensus on the causes of the crashes of 1929, 1973-74, 1987, 2000-2002, and 2007-2008, although there's no shortage of simple narratives claiming to explain the causes.
Seemingly small changes in the behavior of buyers and sellers can have a disproportionate impact on market capitalization, because share prices are set at the margin by the last trade executed, between a particular buyer and a particular seller. Billions of shares of a stock could trade hands at $100/share, but if one share then trades hands at $1/share, the company's market capitalization at that moment is 99% lower, even though only one dollar changed hands. This sort of thing was in fact seen during the great crash of 1929, when there were occasionally no normal bids for some stocks, and tiny orders to buy them for less than $1/share suddenly were filled, temporarily sending market caps to near zero.
EDIT: I made many changes to this comment so it better reflects what I meant to write the first time around.
- tavavex
I'm no economist or investor, but down 28% in a day seems insane for a company at this scale. And they didn't even perform badly, imagine what would happen if they missed their earnings projections.