Nvidia, AMD and Intel stocks fell before Thursday’s opening bell as a renewed Treasury selloff confronted Wall Street’s artificial-intelligence trade with a valuation test across the wider technology sector.
Intel dropped about 3.4% in pre-market trading, AMD fell 2.3% and Nvidia lost 1.3%.
The pressure followed a surge in the US 10-year Treasury yield above 5.1%, after stronger business activity and firmer cost pressures revived expectations that the Federal Reserve may have more tightening ahead.
Five percent changes the maths
The macro shock came from S&P Global’s September flash PMI. Its composite output index jumped to 58.4 from 56.0 in August, the strongest reading since July 2021, while input costs rose at the fastest pace in nearly four years.
That combination pushed the 10-year Treasury yield to about 5.1%, its highest since 2007, and made long-duration growth stocks harder to own.
Higher yields hurt companies such as Nvidia and AMD in two ways.
They raise the discount rate applied to future earnings while also giving investors a higher return from government bonds without taking equity risk.
Emily Bowersock Hill, chief executive of Bowersock Capital Partners, told Barron’s that “Treasury yields at this level pose significant competition to equities.”
AMD and Intel raised the bar
The timing matters because semiconductor expectations were repriced aggressively only days ago.
AMD surged 9.9% on Monday and crossed $1 trillion in market value for the first time, while Intel jumped 12.1%. Nvidia gained 2.3%.
The move reflected renewed enthusiasm that agentic AI and rising inference workloads could broaden compute demand beyond GPUs towards CPUs and other infrastructure.
Thursday’s yield shock therefore lands on stocks that had just become more expensive.
Goldman Sachs’ Anshul Sehgal offers the strongest counterargument to the bond-market pressure.
In a September 18 interview published by Goldman, he said investors were increasingly attracted to long Treasuries above 5%, but argued that the better asymmetry remained elsewhere.
“Personally, I think the asymmetric expression is being long compute,” Sehgal said.
His reasoning is straightforward, as a Treasury offers a fixed return, while successful AI infrastructure could still produce much larger upside if computing demand expands as expected.
Demand has not cracked
So far, there is limited evidence that the semiconductor weakness reflects an AI-spending downturn.
Gabelli Funds portfolio manager Hendi Susanto told MarketWatch last week that customers continue signing multiyear agreements for chips, networking equipment and other infrastructure.
“That’s not what the front end of a downturn looks like,” he said.
Susanto also pointed to inference, enterprise AI and physical AI as future demand drivers, while noting that semiconductor capacity takes years rather than quarters to add.
That distinction is crucial, as Nvidia, AMD and Intel can fall because investors demand lower multiples even while customers continue ordering more compute.
If Treasury yields remain above 5%, Wall Street may become less willing to reward every company attached to the AI theme equally.
Investors will increasingly demand proof that capital spending converts into revenue, margins and cash flow quickly enough to beat a risk-free alternative.
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