US chip stocks tumble as earnings miss and AI regulation worries intensify
Major semiconductor companies fell sharply on Thursday after weak guidance from Qualcomm and Arm and concerns that a Democrat-led Congress could tighten AI data-centre regulations.
Chipmakers experienced a broad sell-off on Thursday, extending losses from the previous session. Shares of AMD, Arm Holdings, Qualcomm, Micron Technology and Sandisk each dropped between 9% and 17%.
The declines were driven by worries that a Democrat-led Congress may pursue stricter rules on artificial-intelligence infrastructure and data-centre development, alongside weaker-than-expected earnings outlooks from Arm and Qualcomm.
Qualcomm’s stock fell 14% after the company issued a profit forecast that fell short of analyst expectations, while Arm’s shares slid 15% following revenue guidance that did not meet Wall Street estimates.
Micron Technology declined 13% after the memory chipmaker paused plans for a new plant in Taiwan due to labour disputes. Sandisk, after a 7% drop the day before, lost an additional 15% at its intraday low.
South Korean memory maker SK Hynix’s American-depositary receipts fell 14% after the company’s shares dropped in overseas trading, and Nvidia’s stock declined 9%, marking its largest fall since April 2025. Intel shares were down 10% and AMD fell 17%.
The broader market also weakened, with the S&P 500 down 4% and the Nasdaq 100 slipping as much as 6.4%. The PHLX Semiconductor Index, which tracks U.S.–listed semiconductor stocks, fell 11%, extending Wednesday’s losses, while the Dow Jones Industrial Average declined 3%.
Analysts note that the AI sector has shown heightened volatility, with concerns that high valuations may be unsustainable and that massive investments in AI data centres might not generate sufficient productivity gains or profits.
Political developments added to market anxiety. Democrats secured key gubernatorial victories in Ohio, Georgia and Texas, states that host significant planned data-centre projects, potentially prompting tighter local regulation. President Donald Trump, who has expressed support for the AI industry, said the recent conflict in Iran contributed to voter frustration over rising gasoline prices, which he linked to the midterm outcomes.