Chip Stocks Fall on AI Spending Fears; UPS, Carrier Global Rise on Upbeat Outlooks

U.S. semiconductor stocks faced broad premarket pressure on Tuesday, weighed down by renewed investor concerns about the sustainability of the artificial intelligence boom and intensifying competition. The sell-off in technology contrasted with gains in industrial and logistics sectors, as strong earnings reports from companies like United Parcel Service and Carrier Global lifted their shares.

AI Concerns Weigh on Chipmakers

The semiconductor sector fell as investors questioned the long-term viability of the AI infrastructure build-out, citing rising financing costs and increased competition from China. Sentiment was further dampened by the initial public offering of ChangXin Memory Technologies (CXMT) in Shanghai, which stoked fears of a more crowded memory chip market.

The downturn was widespread across the industry in premarket trading:

• Micron (MU), Western Digital (WDC), and SanDisk all fell around 4%.
• AMD (AMD) lost more than 3%, while Intel (INTC) dropped 3.2%.
• Amkor Technology (AMKR) declined 5.3% despite beating second-quarter estimates, as its third-quarter revenue guidance came in below analyst expectations, signaling forward-looking caution.

UPS, Carrier Gain on Strong Results

In a counter-narrative to the tech weakness, several companies reported strong quarterly results and raised their guidance, boosting investor confidence.

Ad

United Parcel Service (UPS) shares gained 2.1% after the delivery giant reported second-quarter adjusted earnings of $1.76 per share on $22.8 billion in revenue, topping Wall Street forecasts. The company also raised its full-year earnings and revenue outlook, citing network improvements following a reduction in Amazon shipping volumes.

Carrier Global (CARR) rose 3.0% after the building systems company posted better-than-expected second-quarter earnings and lifted its full-year financial guidance. Carrier also announced the sale of its NORESCO energy-efficiency business to streamline its operations.

Other Market Movers

Several other stocks saw significant moves on company-specific news. Cadence Design Systems (CDNS) provided a bright spot in the tech sector, rising 2.7% after it beat Q2 expectations and raised its outlook, citing strong demand for its AI-driven chip design software.

In the biotech space, Altimmune (ALT) surged 18% on positive Phase 2 trial results for its alcohol use disorder treatment. Meanwhile, digital media firm BuzzFeed (BZFD) jumped 14.2% after announcing a major restructuring plan that includes cutting its workforce by approximately 35%.