Intel and AMD shares suffered sharp declines on Tuesday as a broader market sell-off swept through technology stocks, with investors increasingly concerned about rising borrowing costs, persistent inflation and elevated oil prices.
The Philadelphia Semiconductor Index fell more than 5%, reflecting the pressure across the chip sector.
Intel (INTC) shares declined over 7%, while AMD fell roughly 5.5%.
Brent crude futures also rose 0.5% to around three-week highs as hopes for an end to the Middle East conflict faded.
Higher oil prices have renewed concerns about inflation and the potential for interest rates to remain elevated for longer.
The 30-year Treasury yield reached its highest level since 2007, while the benchmark 10-year yield remained near its highest level since January 2025.
Higher long-term yields can be particularly damaging for technology stocks because they reduce the present value of future earnings while increasing financing costs for companies investing heavily in expansion.
“The yields are troubling people because it portends a tighter environment and it’s going to be more expensive to borrow money,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in a Reuters report.
“Especially in this whole AI thing where time to pay it back is uncertain. It makes for a nervous investor environment.”
Intel faces additional pressure on stock dilution worries
Intel’s decline was compounded by company-specific concerns after UBS lowered its price target to $112 from $121 while maintaining a Neutral rating.
The reduction added to concerns that Intel’s near-term upside could remain limited despite its longer-term ambitions in artificial intelligence and semiconductor manufacturing.
A major issue for investors is the dilution resulting from Intel’s $20 billion common stock offering, which closed on August 12 at $95 a share.
The offering involved approximately 210.5 million new shares.
Bank of America estimates that the increased share count could reduce Intel’s earnings per share by roughly 4% to 5% as the dilution is incorporated into forward estimates.
The bank recently cut its price target to $145 from $160 but retained a constructive view of the company.
BofA argued that the scale of the capital raise demonstrates management’s confidence in attracting major customers to Intel’s foundry business.
However, the dilution has become a significant overhang for the stock. A positive catalyst from Monday has also faded.
Nvidia’s regulatory filing revealing a roughly $30 billion stake in Intel initially boosted sentiment, but investors have since shifted their focus toward dilution and the latest analyst downgrade.
AMD’s AI financing boost fades
AMD also came under pressure as the broader market decline erased gains linked to the company’s recent financing plans.
The chipmaker reportedly priced a $4.75 billion bond offering to help fund its expansion into artificial intelligence and data centers.
The transaction was AMD’s largest-ever US dollar bond financing, according to NAI 500.
The debt deal gives AMD additional financial flexibility as it manages upcoming funding requirements, including $875 million in bonds due to mature next month.
The financing comes as AMD attempts to capture a larger share of the rapidly expanding AI accelerator market.
At its Advancing AI event, the company raised its projection for the total AI chips market to $1.4 trillion by 2030, according to TipRanks.
For investors, however, the near-term market environment is making it harder for even strong AI growth stories to escape pressure.
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