Chip stocks rebounded in Friday's premarket session after Thursday's brutal sell-off. Memory names led the bounce, though early gains recovered only part of the prior day's losses.
SanDisk Corp. (SNDK) rose 9.4% to $882.31 in premarket trading as of 8:09 a.m. ET, according to market data. The flash storage maker led memory stocks lower on Thursday, closing down 22.3% at roughly $806.
Micron Technology Inc. (MU) gained 6.9% to $701.45 after sliding 17.5% to about $656. Advanced Micro Devices Inc. (AMD) climbed 7.6% to $435.20 following a 17.3% drop to near $404.
What Sank Chips on Thursday
AI and data center-linked stocks tumbled Thursday as Democrats' sweeping midterm victory fueled concerns about potential hurdles to the industry's rapid expansion.
Multiple experts warned that some U.S. data center capacity scheduled to come online in 2028 could be at risk from construction pauses.
Citi Research added to the anxiety when it flagged an "exponential" new threat to data centers as it tracked increasing pauses and cancellations on construction.
Other headwinds piled on. China's delay in approving imports of Nvidia's H200 chips and a soft profit outlook from Qualcomm added pressure, while the Nasdaq fell 5.5%. CNN's Fear & Greed Index dropped to a reading of 20, in the "Extreme Fear" zone, versus a prior reading of 34.
Thursday Close vs. Friday Premarket
NVIDIA Corp. (NVDA) rose 4.2% to $189.18. The chipmaker's 9.3% plunge Thursday erased more than $400 billion in market value. Analysts expect earnings of $2.48 per share on revenue of $109.17 billion when the company reports later this month.
Marvell Technology Inc. (MRVL) posted one of the sharpest rebounds, up 9% to $145.60. Arm Holdings PLC (ARM) gained 6.8%, and Super Micro Computer Inc. (SMCI) added 5.6%.
Broadcom Inc. (AVGO) and Intel Corp. (INTC) each rose close to 5%. Qualcomm Inc. (QCOM) lagged the group with a 2.7% gain.
Dow futures fell more than 500 points ahead of the open, as Thursday's tech sell-off continued to weigh on the price-weighted index even while chip stocks staged a premarket rebound.
Nasdaq 100 futures pointed higher, and the Invesco QQQ Trust (QQQ) rose 1.5% to $656.80 in premarket trading after falling 6.5% to about $647 on Thursday, according to market data.
Wall Street Splits on the Sell-off
Some strategists see the drop as overdone. Raymond James CIO Larry Adam told CNBC Thursday the AI investment cycle remains intact.
Others point to mechanics. Janus Henderson technology portfolio manager Richard Clode told CNBC forced selling contributed to the downturn after months of volatility and losses among long-short funds.
Not all of the commentary was upbeat. Analyst Dan Ives told CNBC Friday the election results have changed his previously ultra-bullish expectations for data center construction.
The Bottom Line
Friday's bounce leaves most of the group well below Wednesday's levels. SanDisk, Micron and AMD would each need double-digit gains just to get back to where they started the week's second half. Nvidia's results will offer the next major read on AI chip demand.
