Chip and power stocks tumble despite Nvidia's capacity plans

News covers the period after October 20 at 11:00:05 through October 22 at 11:00:05 US Eastern time, including the October 21 publication gap. Public company pages and Japan’s closing data were also checked. US and Canadian securities and other quotes are intraday snapshots retrieved October 22 at 11:12 ET; retrieval times are not trade timestamps. Japanese equities had closed, while Bitcoin uses the data provider’s one-day comparison interval. Global headline, energy and crypto coverage is incomplete; an omitted development should not be read as an absence of news. Treasury and Japanese government bond yields lack confirmed observation dates, so retrieval times are not used to infer daily yield changes.

Today’s Market

In Thursday’s US session, S&P 500 ETF VOO fell 1.4%, Nasdaq 100 ETF QQQ lost 2.6%, and semiconductor ETF SMH dropped 5.5%. Canadian large-cap ETF XIU declined 1.0%. The sharpest losses extended from chips to data-center equipment and power producers: Vistra fell 9.52% and Vertiv lost 8.53%. Compared with the October 20 midday snapshot, when chips rose modestly and power producers moved little, weakness across the AI construction chain has widened. Public evidence still does not establish a single new event behind the selloff. VOO, QQQ, SMH, XIU, Vistra, Vertiv.

Long-term Treasury ETF TLT gained 1.3%, the VIX volatility index rose 15.9% to 19.34, and the dollar index edged up 0.1% to 101.84. Falling equities, rising long bonds and higher volatility are consistent with greater risk aversion, though a common trigger remains unconfirmed. WTI continuous futures instead rose 1.7% to USD 98.82 a barrel, so asset prices did not uniformly signal cooling demand. TLT, VIX, Dollar index, WTI.

The Main Stories

Nvidia announces capacity expansion, but chip stocks fall broadly

On October 21, Nvidia announced substrate agreements with IBIDEN, Samsung Electro-Mechanics and Unimicron intended to bring their relevant combined capacity to 2.5 times its current level over three years. Amkor plans to increase advanced-packaging interposer wafer capacity by more than 300% by the end of 2028. Nvidia is also providing KYEC with a USD 1.1 billion capacity-reservation prepayment to support US testing facilities, targeting high-volume production in April 2027. These are future expansion arrangements and targets; the additional capacity is not yet fully available. Nvidia announcement.

Expansion could ease substrate, packaging and testing constraints, but the announcement was not accompanied by rising share prices. Nvidia fell 4.05%, AMD lost 7.92%, Arm declined 7.51%, and Intel dropped 6.81%. TSMC’s US depositary receipts, Micron and Broadcom each fell roughly 4% to 5%. SMH is down 13.4% over one month, with today’s decline extending recent weakness. Nvidia, AMD, Arm, Intel, TSMC, Micron, Broadcom, SMH.

My reading is that suppliers’ willingness to expand provides company-level evidence that AI infrastructure construction continues. It cannot, by itself, establish whether end demand, earnings or current valuations support share prices. The latest item in AMD’s accessible release list was dated October 12 and did not provide a new disclosure explaining today’s decline. A reliable catalyst is still missing: the losses alone do not establish that orders have fallen, and the expansion announcement cannot simply be labeled the cause of the selloff. AMD release list.

Equipment and power producers suffer deeper losses, with no confirmed common business catalyst

Vertiv fell 8.53% and Dell lost 7.76%. Among power producers, Vistra dropped 9.52%, Constellation Energy fell 5.70%, and NRG declined 5.36%. Large platform companies also weakened: Meta lost 6.17% and Amazon fell 4.09%, while Microsoft declined 1.23%. The losses span several stages of AI investment, with substantial differences in magnitude. Vertiv, Dell, Vistra, Constellation, NRG, Meta, Amazon, Microsoft.

Vistra’s accessible release list still showed October 15 as its latest news. Vertiv’s and Meta’s release pages did not supply new entries that could confirm a catalyst for today’s move. It remains unconfirmed whether contract cancellations, project delays or guidance cuts contributed. My reading is that Nvidia’s capacity plans still depend on actual customer investment, equipment deliveries and power-contract execution before becoming revenue for these companies. Today’s prices do not establish which stage, if any, has changed. Customer spending revisions or company order disclosures would provide a firmer basis for explaining the differences. Vistra release list, Vertiv releases, Meta releases.

Tesla revenue is almost flat as operating income falls by more than half

Tesla reported third-quarter results on October 21. Revenue was USD 28.046 billion, essentially unchanged from USD 28.095 billion a year earlier, but operating income fell about 56%, from USD 1.624 billion to USD 718 million. Net income attributable to common stockholders was USD 787 million, versus USD 1.373 billion a year earlier. Diluted GAAP earnings per share fell from USD 0.39 to USD 0.22. Stable revenue alongside substantially lower profit means each dollar of revenue generated less operating income. Tesla Q3 10-Q.

Tesla fell 1.41% intraday, close to VOO’s decline and much less than the losses in chips and equipment. Lower profit weakens the support from current earnings. Without a reliable comparable consensus or a price path around the release, however, the results cannot be called a miss, and the effects of earnings and the broader market on today’s share price cannot be separated. Tesla quote.

US weekly earnings lag inflation, pressuring purchasing power

On October 21, the BLS reported that median usual weekly earnings for full-time wage and salary workers reached USD 1,232 in the third quarter, up 1.5% from a year earlier. CPI-U rose 3.5% over the same period. The weekly earnings series is not seasonally adjusted, and the 1.5% increase is nominal. A rough inflation adjustment using those two growth rates implies a purchasing-power decline of about 1.9%. This does not track wages for the same workers over time or replace data on total household income and consumption. BLS release.

Income growth below inflation may limit consumers’ ability to expand spending. It is one weak signal for demand, but cannot by itself explain today’s concentrated technology losses. Oil’s simultaneous rise also makes a broad cooling-demand explanation inadequate for all asset moves.

Also Worth Knowing

• The Nikkei 225 closed at 62,907.84, down 2.65% and at its session low. There were 141 declining constituents and 81 advancing ones. Technology contributed about 1,270 points of the roughly 1,713-point decline, or three quarters. Japan’s weakness was also concentrated in technology, but its market closed before the US intraday snapshot; later US losses cannot explain earlier Japanese moves. Official Nikkei summary.
• Despite rising WTI continuous futures, ExxonMobil fell 1.15%, Chevron lost 1.04%, and Occidental declined 1.37%. Higher oil prices did not translate into higher oil-company share prices. A reliable catalyst for today’s oil move remains unconfirmed, and continuous futures quotes are neither spot prices nor settlement prices for one specified contract. Important inventory figures from the EIA petroleum report for the week ended October 16 remain unverified, preventing a conclusion that supply tightened or demand strengthened. WTI, ExxonMobil, Chevron, Occidental, EIA weekly report.
• Bitcoin was about USD 81,292, down 3.3% over its one-day interval. Strategy fell 4.59% and Coinbase lost 4.40%. Their direction was consistent, but crypto and securities use different comparison periods, so company-specific effects cannot be isolated precisely. No new common regulatory or operating catalyst was confirmed. Bitcoin, Strategy, Coinbase.
• OpenAI announced updated model usage policies on October 21, scheduled to take effect November 20. Services that directly provide access to its models, including model routers and AI gateways, must first obtain approval and maintain consistent safety measures and mechanisms for investigating violations. This may affect service access arrangements, but the policy is not yet effective and does not establish that services were interrupted today. OpenAI announcement.
• OpenAI also described work with PHP maintainers, Wiz, Cloudflare and others on critical vulnerabilities. It said GPT-5.6 Sol found a critical flaw that Wiz independently discovered and reported; PHP maintainers led remediation and release. OpenAI proposed a five-stage response framework covering fix validation, coordination with affected organizations and governments, preparation of product updates, and release guidance. This is a development in AI security research and software-maintenance cooperation, with no quantified earnings effect for listed companies. OpenAI announcement.
• In the EIA’s 2025 annual electricity data, released October 21, US utility-scale non-hydroelectric renewable generation rose 12.2% to 822,800 GWh. Solar generation increased 36.6% to 300,303 GWh; coal generation rose 12.7%, while natural-gas generation fell 3.1%. These describe the full-year 2025 generation mix and cannot directly establish this week’s changes in data-center electricity use or fuel demand. EIA Table 1.1.

What to Watch Next

• At the October 22 US close, watch whether losses in chips, equipment and power producers persist, and whether company disclosures explain the sharp moves. Specific changes in orders, customer spending or guidance would provide a basis for translating broad price pressure into earnings assessments.
• Obtain the EIA’s crude and product inventories and refinery-processing data for the week ended October 16 to test whether supply and demand support oil’s rise. A crude inventory decline alone still requires separating the effects of imports, processing and end demand. EIA weekly report.
• Before OpenAI’s new policies are scheduled to take effect on November 20, watch approval and access arrangements for model routers and AI gateways. Distinguish the announcement of rules from service changes and actual business effects. Policy announcement.

This article is public market commentary and personal research notes. It does not constitute investment advice.