(Nov 6): Shares of semiconductor stocks plunged on Thursday, extending a recent selloff as investors turn sceptical on the artificial intelligence (AI) trade after the Democrats dominated the midterm elections.

The Philadelphia Stock Exchange Semiconductor Index was down 9.2%, putting it on pace for its worst day since June. The index, known as the SOX, is down about 12% this week, which would be its worst performance since April 2025, and is on track for a fifth straight weekly drop, its longest streak since then.

Democrats took control of the Senate and House of Representatives in Tuesday’s midterm elections, with many voters indicating their opposition to data centres. In Texas, governor-elect Gina Hinojosa has called for an immediate moratorium on data centre development.  

Data centres are a critical component of AI infrastructure, and they are filled with racks of semiconductors. Should spending on data centres slow, it would have massive ramifications for chipmakers over the coming years.

Among notable movers, Nvidia Corp fell as much as 7.5%, the worst intraday drop since April 2025. Advanced Micro Devices Inc slumped 15%, Micron Technology Inc lost 13%, Broadcom Inc dropped 7.2% and Intel Corp dropped 9.2%. Meanwhile, Qualcomm Inc tumbled 10% in the wake of disappointing results, while Arm Holdings plc shed 13% on its own report. 

The selloff extended beyond chipmakers to other parts of the trade. Memory storage companies Western Digital Corp and Seagate Technology Holdings plc slid more than 14%, and so-called neocloud companies CoreWeave Inc and Nebius Group NV were down significantly as well.

However, not everyone on Wall Street is throwing in the towel on chipmakers. Deutsche Bank, for instance, said the group is attractive, especially relative to the software sector. 

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