Intel's forecast sank the chip ETFs, and funds holding more Intel fell harder

Intel sank 28.6% on Friday after a weak forecast, and the chip funds fell with it. The iShares Semiconductor ETF SOXX lost 8.2%. The VanEck Semiconductor ETF SMH lost 7.0%.

Invesco QQQ Trust, Series 1 QQQ, which tracks the Nasdaq-100, fell 3.5%. The State Street SPDR S&P 500 ETF SPY lost 1.8%. The Invesco S&P 500 Equal Weight ETF RSP lost 0.8%, a milder day than the fund built around the largest companies.

Intel and the semiconductor ETFs

The quarter Intel reported Thursday night was not the reason the stock fell. Adjusted earnings were 52 cents a share against the 40 cents analysts expected, and revenue of $16.51 billion was in line with the $16.5 billion estimate and up 21% from a year earlier, CNBC reported, using estimates from analysts polled by LSEG, the London Stock Exchange Group. Data-center and artificial intelligence revenue jumped 78% to $7.3 billion. The personal-computer business fell 5% to $8.1 billion and missed estimates.

What sank the shares was the forecast. Intel expects fourth-quarter revenue of $15 billion to $16 billion and adjusted earnings of 25 cents a share. Analysts polled by LSEG had expected $17.1 billion and 43 cents, CNBC reported.

"We see the PC slowdown continuing at least through the first half of next year," finance chief David Zinsner said in the company's release, CNBC reported.

An explosion this month at a factory in Israel will cost Intel about $600 million in lost revenue over two quarters, Zinsner said Thursday, CNBC reported.

Intel was 8.1% of SOXX in the fund's latest holdings and 4.1% of SMH. Nvidia, the largest holding in SMH, is 19.6% of the fund, and the stock fell 4.2%. SMH lost less because Intel was a smaller share of it, and because that holding fell far less than Intel did.

The State Street SPDR S&P Semiconductor ETF XSD spreads its holdings more evenly. Intel was 2.3% of the fund, and the fund still fell 6.3%, because the rest of the group fell too. Advanced Micro Devices dropped 10.9%. Taiwan Semiconductor fell 5.9%, Broadcom 5.5% and Micron 5.3%.

Reddit, Exxon Mobil and gold

Reddit fell 29.3% to $91.67. CNBC reported it was the worst day since the company went public in 2024, worse than a 21% drop on July 31, after fourth-quarter sales guidance of $1 billion to $1.03 billion came in below the $1.05 billion analysts expected.

Search-referral traffic from Google went "down meaningfully in this quarter" because of AI, chief executive Steve Huffman told CNBC.

Exxon Mobil rose 2.2% and Chevron rose 1.8%. Both touched all-time highs, CNBC reported, after refining profits surged. Exxon's adjusted earnings were $4.23 a share against an LSEG estimate of $4.08. Chevron's were $5.28 against an LSEG estimate of $4.89.

"Refining capacity is very tight today," Exxon chief executive Darren Woods told CNBC.

CNBC reported that attacks on refineries in Russia and the Middle East have cut global fuel-making capacity, that Exxon's Gulf Coast refineries ran at 100% of capacity, and that Chevron's U.S. refineries ran at 98%. Exxon was 24.3% of the State Street Energy Select Sector SPDR ETF XLE, and Chevron was 18.3%. The fund gained 1.9%.

Regeneron Pharmaceuticals rose 13.3%. Dow Jones Newswires reported third-quarter revenue of $5.12 billion, up 36% and ahead of the $4.56 billion analysts expected.

SPDR Gold Shares GLD, a fund that holds gold, fell 3.5% and touched a 52-week low. CNBC reported that higher energy prices and persistent inflation concerns had strengthened expectations that U.S. interest rates will stay high. Analysts at Commerzbank said the fall in technology stocks may have led to forced selling and margin calls, CNBC reported.

Binance said a security incident had an estimated impact of $6.3 billion, with about $3 billion frozen so far, and pledged to cover all losses, CNBC reported. The iShares Bitcoin Trust ETF IBIT fell 5.1%. Coinbase fell 10.6% and touched a 52-week low.

Those were separate stories. The chip funds were one story. The chip fund holding more Intel fell harder, and the one that spreads its holdings more evenly still fell, because the selling ran through the group.