Andrei Berezovskii
Semiconductor stocks were deep in the red on Friday to end the week as investors awaited the start of earnings season.
Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD) were among the biggest losers in the sector, each dropping nearly 5%, amid a report that China has asked telecom companies to phase out foreign chips in products by 2027 in favor of domestic options.
China was Intel's largest market in 2023, accounting for 27% of its total revenue. China was AMD's third-largest market, contributing 15% to sales.
Intel is slated to report first-quarter results on April 25 while AMD has scheduled to report their quarterly results on May 1.
Nvidia (NASDAQ:NVDA) shares fell 3% and have stayed in correction territory since last month's GTC event when it showed off its new Blackwell line of GPUs.
On Thursday, as Raymond James upped its price target on the semiconductor giant and said investor concerns about a pause in spending are "unwarranted."
Nvidia will report its fiscal 2025 first-quarter results after the close of trading on May 22.
Chip equipment companies were also lower on Friday, even as Citi opened up a 30-day positive catalyst watch on ASML (NASDAQ:ASML).
Recent trends are likely to be evident when ASML and European technology hardware companies report first-quarter results, analyst Andrew Gardiner said. Gardiner reiterated the firm's Buy rating and €1,250 price target on the stock.
ASML is expected to report quarterly results on April 17. A consensus of analysts' estimates the company will earn $2.99 per share on $5.8B in revenue.
ASML shares fell 3.1%, while competitors Lam Research (LRCX), Applied Materials (AMAT) and KLA Corp. (KLAC) were down similar amounts.
Other semiconductor stocks in the S&P 500 were also lower on Friday amid a steep decline in the broader indexes due to ongoing worries of inflation and geopolitical tensions.
Qualcomm (QCOM) fell 2%, while Micron (MU) was off nearly 4%. Analog chip suppliers Texas Instruments (TXN) and Analog Devices (ADI) fell 2.7% and 2.5%, respectively while Broadcom (AVGO) fell 2.8%.
Qorvo (QRVO) and Skyworks Solutions (SWKS) fell more than 2% each amid a report that Huawei is slated to introduce a new premium smartphone in the China market. Qorvo and Skyworks are Apple (AAPL) suppliers.