Chip stocks pulled back in premarket trading on Tuesday following a sharp rally at the start of October, with Intel, AMD, Micron, SanDisk, and the iShares Semiconductor ETF declining between 0.1% and 0.7%. Nvidia was the lone major gainer in the group, rising about 0.7% after hitting a fresh record high on Monday. The broader market saw the Nasdaq Composite close at a record on Monday, up 1.1% on gains in Nvidia and Microsoft, supported by falling oil prices and optimism ahead of third-quarter earnings.
The recent rally has been fueled by expectations that weaker-than-expected jobs data could reduce the likelihood of the Federal Reserve raising interest rates at its October policy meeting. Despite the premarket dip, the iShares Semiconductor ETF has advanced for five straight sessions. Memory stocks faced particular pressure, though analysts remain bullish on the sector. Rosenblatt raised its price target on Micron to $1,900 from $1,500 while maintaining a Buy rating. The firm noted that Micron delivered a "beat-and-raise quarter" but expressed surprise at management's outlook for a slowdown in year-over-year DRAM bit growth. Rosenblatt also highlighted potential shareholder returns, suggesting that a substantial portion of Micron's free cash flow could be directed toward share repurchases, even though the company did not provide a specific fiscal 2027 capital-return target.
Nokia CEO Justin Hotard reinforced the bullish view on AI infrastructure demand, stating that customers could build data centers roughly twice as fast if supply constraints were removed. He identified memory chips and power availability as key bottlenecks slowing construction, emphasizing that strong demand persists even without new AI models from labs like OpenAI. In contrast, Intel shares fell 2.6% on Monday after Elon Musk said his Terafab venture is in discussions with TSMC over a potential collaboration. Investors weighed the possibility of TSMC playing a larger role in the project, which Intel supported in April as the first to offer assistance for Musk's Texas-based chip venture.
Retail sentiment on Stocktwits reflected mixed views, with "bearish" sentiment for INTC, AMD, SNDK, and SOXX, "neutral" for NVDA, and "extremely bullish" for MU. One trader commented on Nvidia's momentum, stating, "$NVDA Break out just started. Added more, hold 3900 shares. 300 end of october, lets pump it bulls." Since reporting earnings on Aug. 26, Nvidia shares have climbed roughly 14%. As of Monday's close, the stock is up 24.8% year to date. While Nvidia has outperformed its peers in the ongoing second half of the year, Intel and AMD remain significantly higher year to date at 215% and 195%, respectively.