Intel, AMD and AMD are the biggest chip companies of 2022

New York City CNN Business Semiconductors are in everything. Concerns about a global recession and concerns about supply shortages stemming from lingering pandemic-related shutdowns in Asia over the past two years are hurting top chip companies.

Intel is not the only chip company that is having a tough time this year.

The shares of semiconductor rivalsandhave plunged more than 50%. The supply chain woes and fears of a slowing economy are weighing on the whole sector. The benchmark, or SOX, as it is known on Wall Street, is down nearly 40% in 2022.

Intel has been a laggard for a long time. Shares have traded at their lowest level since May 2016 and they are now trading at their lowest level since May 2016. The stock is down more than 25% in the past five years, while the SOX has more than doubled, Nvidia is up nearly 200% and AMD has gone up more than 400%.

Can new CEO Pat Gelsinger he took over in 2021 turn Intel around? It's possible that investors will give Gelsinger more time to get the company back on track.

One fund manager who owns the stock thinks Gelsinger will be able to return Intel to its former glory. He said it will take time and that investors won't rush into the stock just yet.

Jeff Travis, portfolio manager of Oak Associates Funds said Intel will correct the ship but over the long term, I think it will be longer-term. Travis believes that semiconductor stocks are still a good secular growth industry and that valuations are attractive, given how sharply the stocks have fallen.

The analysts noted that there were a number of negative industry data points that have been pointed out by cautious comments about demand from Intel, AMD and Nvidia in recent weeks. The Goldman analysts said that there is weakness across the PC, enterprise server, and mobile end-markets. It may be soon to call a bottom for the major chip companies.

The month that ends with Halloween has a bad reputation for being scary for traders. Wall Street had some historic plunges in October. For example, think 1929, 1987 and 2008.

These massive October sell-offs are actually anomalies. Stocks enjoy strong year-end rallies as investors bet on healthy earnings growth and strong consumer spending during the holidays.

Most major corporations will report earnings in the third quarter in October. That means that they can give updated outlooks for the fourth quarter and give some first glimpses of what they are expecting for sales and profits in the year 2023, and that means they may also give updated outlooks for the fourth quarter.

Analysts have cut their forecasts for the third quarter in the past few weeks. Wall Street is expecting earnings growth to be just 3.2% in the third quarter, according to data from FactSet.

If they need to slash estimates for the end of this year and next year, that could push stocks even lower.

There is more downside risk for US stocks, said Luke Tilley, chief economist and head of asset allocation and quantitative services for Wilmington Trust Investment Advisors.