Stock Market Today, Nov. 5: Intel Falls on Weak Fourth-Quarter Sales Outlook Amid Chip Selloff

Intel (NASDAQ:INTC), an x86 CPUs, data center chips, and contract chip manufacturing provider, closed at $52.25, down 10.33%. Intel fell after a broader semiconductor sell-off and weak fourth-quarter guidance, while investors are watching data-center spending and server demand next.

Trading volume reached 260.8 million shares, coming in about 129% above its three-month average of 113.6 million shares.

How the markets moved today

The S&P 500 (SNPINDEX: ^GSPC) fell 4.36% to 7,354, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) dropped 5.52% to 24,315. Among semiconductor manufacturers and foundry services, Advanced Micro Devices (NASDAQ:AMD) closed at $404.40, down 17.26%, while Qualcomm (NASDAQ:QCOM) finished at $156.75, down 9.49%, underscoring pressure across chipmakers.

What this means for investors

Today, Nov. 5, Intel stock continued its bad week, which began on Oct. 29 after the company announced earnings for its fiscal third quarter, ended Sept. 26. That Q3 report included a weak fourth-quarter sales outlook in the range of $15 billion to $16 billion, well below Wall Street's expectation of $17 billion in revenue.

Intel noted weakening PC demand weighed on its Q4 guidance, as the availability of memory chips remained tight, pushing up costs. The memory shortage is expected to extend through at least the first half of 2027, so this factor looks likely to remain a prolonged impact to Intel's income for now.

Adding to last week's post-earnings sell-off was this week's U.S. midterm election results. The Democratic Party gained control of Congress and captured key governorships in states vital to the artificial intelligence (AI) data center build-out, such as Texas, Georgia, and Ohio. The election outcome caused a broader semiconductor sector sell-off, sweeping up Intel shares with it. Investors are concerned that incoming Democratic leadership might push for tighter AI regulations and pause data center construction projects.

These worries contribute to concerns that the massive growth in AI infrastructure spending can't continue, although Intel's Q3 results included what management called, "our strongest data center revenue growth in 15 years."

Robert Izquierdo has positions in Advanced Micro Devices, Intel, and Qualcomm. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Qualcomm. The Motley Fool has a disclosure policy.