Friday's chip rout: SOX falls 3.43% as AMD gives back Thursday's rally and Nvidia slides on an HSBC downgrade
The chip index fell 3.43% to 10,146.32 on Friday as AMD gave back Thursday's whole rally, Nvidia fell a second day on an HSBC downgrade to Hold, and the selling spread to every corner of the sector — from Cisco to Dell to the memory makers.
📊 Scorecard: our Bearish call on $NVDA is scored from $162.85, the last close before it ran. Its first result comes after the next close.
The News
The chip trade that defined Thursday ran backward on Friday. The Philadelphia Semiconductor Index, known as the SOX, fell 3.43% to 10,146.32 as the selling spread to every corner of the sector. AMD sank 8.75% to $534.06, erasing Thursday's 5.86% rally and leaving the stock 3.4% below its November 11 close. Broadcom fell 4.76% to $347.01 after Rothschild & Co Redburn cut it to Neutral. Nvidia slipped another 2.01% to $162.85 after HSBC cut it to Hold and slashed its price target to $170 from $365, CNBC reported, saying the stock will struggle until a permanent chief executive is named.
The damage went well beyond the big names. Cisco fell 6.24% to $95.64, just a day after its record quarter. Dell dropped 7.18% to $344.53 after a report traced 22 of its servers carrying restricted Nvidia H800 chips to a data centre in Shanghai — that report is a single news account so far, and the details have not been independently verified. TSMC fell 1.67% to $398.73, Intel 2.52% to $59.66, Applied Materials 2.74% to $370.50, Lam Research 3.36% to $225.92, KLA 3.16% to $152.32, Marvell 4.68% to $156.76 and Qualcomm 2.64% to $172.47. Memory fell with the rest: Micron dropped 2.52% to $778.31 and SanDisk 5.59% to $885.01.
The wider market gave the sector no help. October producer prices — the prices businesses charge each other, a measure of inflation — rose 6.5% from a year earlier, the fastest annual rate since November 2022. The yield on the 10-year Treasury bond, the interest rate the US government pays to borrow for a decade, pushed to 5.154%. The S&P 500 fell 0.40% and the Nasdaq 0.91%. The one counterpoint in chips was Cerebras, which jumped 11.22% to $108.72 as its Thursday earnings beat landed in the regular session. Nvidia reports third-quarter results on Tuesday, November 17, at about 1:20 p.m. Pacific — its first results under interim chief executive Colette Kress.
Friday was the whole chip trade running backward: the HSBC downgrade gave sellers a reason, and the hot inflation print gave them an excuse — but the real story is that nobody yet knows what Nvidia is worth without Huang.
Why It Matters
Start with the downgrade, because it set the tone. HSBC did not just trim Nvidia — it cut the stock to Hold and took its price target from $365 to $170, a cut of more than half, with the argument that the shares will struggle until a permanent chief executive is named. That lands differently a day after a chief executive resigned without warning: the market has no settled leadership story, and a target cut that steep tells investors the analyst thinks the uncertainty itself is the problem, not the business.
Then look at how far the selling spread. This was not Nvidia dragging an index down on its own weight. AMD gave back its entire Thursday rally in a single session. Cisco fell 6.24% the day after a record quarter. Dell fell 7.18% on a report — still only a single news account — that traced 22 of its servers with restricted Nvidia H800 chips to a Shanghai data centre. When good news (Cisco's quarter) and bad news (the Dell report) both end in selling, the market is not trading on company news; it is de-risking a whole theme.
The macro backdrop made it worse. Producer prices rising 6.5% year over year, the fastest since November 2022, and a 10-year Treasury yield at 5.154% raise the cost of borrowing for the companies building AI data centres and make future profits worth less today. Add the memory sell-off — Micron down 2.52%, SanDisk down 5.59% — and Friday reads as a day when the AI trade's two pillars, chips and memory, both wobbled at once. The saving grace is that the week still ended up 8% for the SOX, so this is a correction inside a rally, not yet a rout of the rally itself.
Analyst's Take
Our call is Bearish, and the reason is simple: this was not a one-stock story. When a downgrade to one company drags down thirteen chip stocks at once, the market is pricing in something bigger than a single analyst note — it is pricing in doubt about the whole AI buildout, and doubt about who runs its biggest company. Nvidia is now down 12.75% in a week, its sixth straight weekly fall, and its market value closed below $4 trillion for the first time since July 2025. That is not a blip; it is a repricing.
The counterpoint matters too. The SOX still finished the week up 8.05%, and Cerebras jumped 11% on a real earnings beat, which says investors are not abandoning AI chips — they are abandoning the ones whose story just got complicated. AMD's 8.75% fall after a 5.86% rise the day before is the clearest sign of a market with no conviction: money is sloshing between Nvidia and its rivals, not committing to either. Tuesday's Nvidia results, the first under interim chief Colette Kress, are now the biggest test of the year for the whole sector. Until then, the safest read is that volatility is the trade, not the dip.
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By The Numbers
FAQ
Why did chip stocks fall so hard on Friday?
The trigger was Nvidia: HSBC cut the stock to Hold and slashed its price target to $170 from $365, saying the shares will struggle until a permanent chief executive is named. That came a day after Nvidia's first session without Jensen Huang, and the selling spread across the whole sector — AMD, Broadcom, Cisco, Dell and the memory makers all fell sharply.
How bad was AMD's day?
AMD sank 8.75% to $534.06, wiping out Thursday's 5.86% rally and leaving it 3.4% below its November 11 close. It was the mirror image of Thursday, when money rotated out of Nvidia and into AMD; on Friday the whole chip trade ran backward.
What did HSBC actually say about Nvidia?
HSBC cut Nvidia to Hold from Buy and cut its price target to $170 from $365, with analyst Frank Lee arguing the stock will struggle until a permanent CEO is named. Nvidia fell 2.01% to $162.85 on Friday and is down 12.75% on the week — its sixth straight weekly decline, the longest since 2012 — with its market value closing below $4 trillion for the first time since July 2025.
Did anything in chips go up?
Yes, one name: Cerebras jumped 11.22% to $108.72 as its Thursday earnings beat landed in the regular session. Everything else in the index fell, and the PHLX Semiconductor Index still finished the week up 8.05% despite Friday's drop.
When does Nvidia report earnings?
Nvidia reports third-quarter results for fiscal 2027 on Tuesday, November 17, at about 1:20 p.m. Pacific time — its first results under interim chief executive Colette Kress.
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Source: Motley Fool