Google parent Alphabet fell as much as 7.4% after third-quarter revenue came in below expectations, while software giant Microsoft lost 8.1% following a disappointing revenue forecast. Texas Instruments, a bellwether for the semiconductor industry, tumbled 6.1% after giving a forecast that was weaker than analyst estimates.

Signs of weakness were widespread in the financial results. Microsoft posted its weakest quarterly sales growth in five years, throttled by the surging dollar, slumping PC demand and faltering advertising revenue. At Alphabet’s most important financial engine, the search and related businesses, sales fell shy of analyst estimates as spiralling inflation crimped growth in digital advertising.

Nasdaq 100 Index futures traded down 1.9% as of 10.22am in Hong Kong. The underlying gauge had rebounded more than 9% off its 14 October low, trimming its loss for the year to 28%.

The selloff in extended trading was broad-based. Amazon.com fell 4.9%. Those that derive sales from online advertising followed Alphabet lower, with Meta Platforms and Pinterest dropping more than 4% each. Among software companies moving in the wake of Microsoft, Datadog tumbled 7%, Snowflake fell 5% and Salesforce dropped 3%. In the chip space, Analog Devices, ON Semiconductor, and Marvell Technology also dipped.

Pessimism is growing in the semiconductor industry, which had been one of the hottest sectors during the pandemic. Texas Instruments, whose chips go into everything from home appliances to missiles, saw shares tumble after its weak forecast signalled that the chip slump is spreading beyond computing and phones into other businesses.

South Korean chipmaker SK Hynix reported a 60% decline in profit and said it would cut capital expenditures by more than half. It warned of “an unprecedented deterioration in market conditions”.

Hynix is joining fellow memory makers Micron Technology and Kioxia Holdings in slashing production plans as chip prices tumble. That pullback may ultimately prove beneficial for profits – and stock prices, analysts said. Hynix shares, which have lost 28% this year, were up 1.3% in morning trading.

Other Asian chipmakers also rose. Samsung Electronics climbed 2.6%, while Taiwan Semiconductor Manufacturing added 0.9%.

Chip shares are rising in response to actions from memory makers to cut output, said Greg Roh, head of technology research at HMC Investment & Securities. “Inventory will decrease accordingly and demand will rise again,” he said, adding that the stock moves are already reflecting expectation of a market recovery.