Chip stocks fall sharply as five companies report record revenue

Semiconductor index drops 8.05%

As of 10:18 a.m. ET, the PHLX Semiconductor Index, known as the SOX, was down 826.18 points at 9,442.47. The decline was steeper than the Nasdaq Composite, which was down 3.74%, and the S&P 500, which was down 2.21%.

The selling extended across the wider market. The Dow Jones Industrial Average was down 1.23% at 52,698.00, while the small-cap Russell 2000 was down 1.74% at 2,807.10. The 10-year Treasury note yield was 4.868%, compared with 4.894% at the prior close.

Despite the session's decline, the SOX remained about 33% above its 2025 closing level, based on daily closing prices. The index finished 2025 at 7,083.13 and closed at 7,190.27 one year earlier. Its highest close of the past 52 weeks was 14,634.72 on June 22, 2026, leaving the morning level about 35% below that peak.

Data center demand drives AMD and Arm results

Advanced Micro Devices reported third quarter 2026 revenue of $13.4 billion, up 45% year-over-year. Its Data Center segment produced record revenue of $8.5 billion, an increase of 97%, which the company said was driven by demand for AMD EPYC processors and the launch of AMD Instinct MI450 Series GPUs. AMD expects fourth-quarter 2026 revenue of approximately $17 billion, plus or minus 3%. Its shares were down 13.44% at 10:18 a.m. ET.

Arm Holdings reported second-quarter fiscal year 2027 revenue of $1,443 million, up 27% year-over-year and its best ever second-quarter revenue, according to the company. License and other revenue rose 50% to $773 million, while royalty revenue increased 8% to $670 million. Arm said data center royalties doubled year-over-year and that its partners shipped more than 10 billion Arm-based chips during the quarter for the first time.

Arm gave third-quarter fiscal year 2027 revenue guidance of $1.54 billion, plus or minus $50 million. Its shares were down 12.14% during the morning session. In the shareholder letter, Arm CEO Rene Haas said, "Arm delivered its fifth consecutive quarter of revenue growth above 20%, reflecting the strength of our business as AI drives increasing demand for compute."

Power, storage and foundry companies also post gains

Onsemi reported third-quarter 2026 revenue of $1,722 million, up 11% year-over-year, and free cash flow of $489 million, up 31%. The company said AI data center revenue increased 39% sequentially and 175% year-over-year. It guided fourth-quarter revenue to between $1,715 million and $1,815 million. Onsemi shares were down 6.27% at 10:18 a.m. ET.

Seagate Technology reported fiscal first-quarter 2027 revenue of $4,233 million, compared with $2,629 million in the same quarter a year earlier. The company reported a GAAP gross margin of 57.3% and free cash flow of $1.5 billion. It raised its quarterly cash dividend by approximately 3% to $0.76 per share and forecast fiscal second-quarter revenue of $4.8 billion, plus or minus $100 million. Seagate shares fell 13.22%.

Tower Semiconductor reported record third-quarter revenue of $526 million, up 33% year-over-year, and record gross profit of $179 million. It expects fourth-quarter revenue of $600 million, with an upward or downward range of 5%. Tower shares were down 8.57%.

The five reports were released before the November 5 session, so they do not explain that day's market move. They give investors company-level revenue, profitability and outlook data to compare with the sharp movements in share prices and the SOX. Market Updates also disclosed that Market Equities Limited and affiliated parties own shares of AMD, creating a stated conflict of interest. The publication said its commentary is not personalized financial advice or a recommendation to buy or sell securities.