AMD Tumbles 10.5%, Nasdaq 100 Sinks 1.7% as Nvidia Scandal Rattles Chips

Advanced Micro Devices sank 10.5% and traded at $524.11 by midday, on track for its worst session since Nov. 5 and wiping out roughly $100 billion in market value. The drop clawed back about a third of the nearly 45% rally AMD had run up over the previous five sessions. The Nasdaq 100 fell 488 points, or 1.7%, to 27,801, while the S&P 500 lost 0.7% and the Dow Jones Industrial Average slipped 48 points, or 0.1%, to 52,249.

The trigger was a new report that 22 servers built by Dell Technologies and loaded with restricted Nvidia H800 chips were sold to Singapore-based Aperia Cloud Services, then installed at a Shanghai data center tied to a company founded by Alice Huang. Dell fell 8.4%. Treasury Secretary Scott Bessent told CNBC on Friday that Treasury had favored blacklisting Nvidia partner Megaspeed, adding: 'The real story here should be, did Nvidia know their client.'

Cisco Systems led blue-chip decliners, dropping 6.4% and erasing about $26 billion in market value. A 250-basis-point squeeze in adjusted gross margin overshadowed record first-quarter revenue and a higher fiscal 2027 outlook. Nvidia itself fell 3.3% to $160.69 ahead of Tuesday's results, its first report without Jensen Huang.

The pain spread across AI hardware. The Technology Select Sector SPDR Fund was the weakest sector, down 2.7%, and the VanEck Semiconductor ETF dropped 4.1%. Applied Digital and IREN each lost more than 8% after a report that Microsoft is reviewing its contracts with so-called neoclouds and plans to work with fewer of them. Optical makers Coherent and Fabrinet each slid 8.3%.

Money ran for cover in consumer staples, where the Consumer Staples Select Sector SPDR Fund gained 1.3%. Modine Manufacturing soared 30.7% on a report that Samsung Electronics is in talks to buy the data center cooling maker. Nu Holdings jumped 11.3% after record third-quarter net income of $1.1 billion, up 31%, on revenue of $5.82 billion that beat the $5.68 billion estimate. Shift4 Payments rose 6.3%, Almonty Industries gained 5.7% and Viking Therapeutics added 5.9%.

On the data front, the producer price index for final demand rose 0.3% in October, below the 0.4% forecast and down from 1.4% in September, while annual producer inflation hit 6.5%, its highest since November 2022. The 10-year Treasury yield rose 3 basis points to 5.14% and the 30-year climbed 4 basis points to 5.47%, while the 2-year eased 1 basis point to 4.85%. The CBOE Volatility Index jumped 6% to 19.83, bitcoin slid 3.4% to $68,984, silver fell 2.1% to $49.02, and West Texas Intermediate crude edged down 0.2% to $88.54.