Semis Split: Equipment Names Hold as NVDA Waits
Chip stocks are de-risking ahead of Nvidia earnings. Intel down 5%, AMD down 4% — but equipment makers AMAT and LRCX are holding relative strength.
Key Points
- Intel is down 5% to $85.98 and AMD is down 4% to $454.36 today, with no company-specific catalysts — this is pure pre-Nvidia earnings de-risking across the chip sector.
- Equipment makers AMAT and LRCX, up 38.1% and 37.6% YTD respectively, are outperforming because forward order book visibility into 2027 insulates them from near-term demand uncertainty.
- Nvidia's upcoming second-quarter earnings call is the single most market-moving event on the horizon; no chip position should be sized without a plan for that print.
Intel is down 5% to $85.98 this morning. AMD is off 4% to $454.36. TSMC is slipping 3% to $406.40. There are no company-specific headlines driving any of these moves — this is the semiconductor sector running a pre-Nvidia earnings purge, and traders who don't understand that dynamic are reading the tape wrong.
What's Actually Driving the Selling
The chip sector is not selling off because the fundamentals have changed. It is selling off because Nvidia's upcoming second-quarter earnings call — for which a conference date has been set but a specific release has not yet been confirmed — is the single most concentrated moment of forward demand signal for the entire AI infrastructure cycle. When you are sitting on significant gains in INTC, AMD, or TSMC, the rational playbook ahead of that call is to reduce exposure and reenter after the print, particularly after the trauma of late July, when the sector shed more than $1 trillion in market cap across a single week.
That July episode is the critical psychological context here. Nvidia alone lost $238 billion in market cap. SK Hynix and Samsung each shed more than $100 billion. Micron dropped $113 billion. AMD and TSMC were both hit hard. The proximate catalyst was renewed fear that low-cost Chinese AI models — which carry dramatically lower compute requirements than frontier Western models — could structurally reduce demand for the cloud services and, by extension, the high-end chips that power them. Michael Field, chief equity strategist at Morningstar, characterized that selloff as "driven largely by sentiment rather than fundamentals," and the subsequent recovery appeared to validate that view. But the scar tissue remains. Traders who held through July's rout are not eager to repeat the experience if Nvidia's call delivers any ambiguity on forward demand.
The Divergence Inside the Sector
The most instructive data point in today's tape is not what is falling — it is what is holding. The equipment makers, specifically Applied Materials at +38.1% YTD and Lam Research at +37.6% YTD, are displaying clear relative strength against the fabless and foundry names. That divergence is not accidental. AMAT and LRCX sell the machinery that TSMC, Samsung, and Intel use to manufacture chips. Their revenue is booked when equipment is ordered and delivered, not when end-market chip demand fluctuates quarter to quarter. With TSMC actively ramping its 3-nanometer advanced node process and the industry broadly investing in leading-edge capacity to meet AI workload demand, the equipment order books carry visibility well into 2027. That forward visibility is a fundamentally different risk profile than owning a fabless designer whose quarterly results depend on hyperscaler GPU procurement decisions.
TSMC itself presents a more nuanced picture. The stock is down 3% today and has underperformed on a YTD basis relative to AMAT and LRCX, sitting at +20.6% versus those names' high-30s returns. But the underlying business data remains strong. TSMC reported revenues up 30% in May alone, and analysts are flagging additional upside catalysts including a potential joint venture with Sony for image sensors — a move that would diversify TSMC's revenue base beyond AI logic into the automotive and consumer imaging markets. The company's leadership in silicon photonics, which is becoming increasingly critical for high-bandwidth AI data center interconnects, is a medium-term differentiation that the current stock price does not fully reflect, according to several buy-side analysts tracking the name.
The laggards within the sector tell a different and more complicated story. Nvidia is down 2.0% YTD — a remarkable number for the company that has been the face of the AI boom — while AMD is off 3.2% YTD and Broadcom is down 6.1% YTD. Intel, by contrast, is up 26.8% YTD, though that gain has been volatile and heavily influenced by news flow around a potential Apple chip supply deal earlier in the year rather than clean fundamental improvement. The YTD leaderboard for semiconductors looks nothing like what most retail investors would have predicted twelve months ago: the narrative was Nvidia up 100%, everything else follows. The reality is that the picks-and-shovels equipment names have quietly outperformed the headline AI chip darlings by a significant margin.
What Traders Watch Next
Positioning into Nvidia's earnings call requires a specific framework, not a general view on AI. The two scenarios that matter most are straightforward. In the upside scenario — Nvidia guides fiscal 2028 revenue growth above the 70% it has already flagged for fiscal 2028, or provides color suggesting hyperscaler demand is pulling forward into the back half of 2026 — the entire sector re-rates higher. INTC, AMD, and TSMC recover their pre-earnings losses and likely extend them. AMAT and LRCX, already at relative strength, push further. In the downside scenario — Nvidia signals any demand softening, delivery delays, or gross margin compression — the July playbook repeats, potentially with more severity given that the sector has partially recovered from that episode and is now re-exposed.
The specific level to watch on AMD is $454, where it is trading this morning. AMD has a technical floor around $440 that has held through multiple pullbacks this year; a break below that on an adverse Nvidia print would likely accelerate selling toward $410. On INTC, the $85–$86 range has provided support; the stock's YTD gain is fragile and largely sentiment-driven, making it more vulnerable than its 26.8% return suggests. For traders who want chip sector exposure without binary Nvidia event risk, AMAT and LRCX remain the most defensible positions — their 2027 order book visibility does not disappear based on a single earnings call. The Nvidia print is the clearing event for the entire sector. Until it arrives, today's selling in INTC and AMD is not a buying opportunity — it is the market telling you to wait.
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