Micron, Sandisk and other AI stocks see steep drops: 'Investors don't like uncertainty'

By Hannah Pedone and Christine Ji

Wall Street is digesting the prospect of a slower AI buildout in the wake of the midterm election results

Sandisk was the worst performer in the S&P 500 on Thursday.

A dramatic selloff in chip stocks drove the Nasdaq Composite to its worst day in a year and a half, as investors digested the potential for the midterm election results to curtail artificial-intelligence momentum.

Shares of Sandisk (SNDK) closed down 22% on Thursday, making them the worst performer in the S&P 500 SPX. Shares of Advanced Micro Devices (AMD), Western Digital (WDC) and Seagate Technology Holdings (STX) and Micron Technology (MU) all lost at least 16%, while Nvidia's stock (NVDA) ended down 9%.

See also: As Nvidia's stock heads for a bear market, bargain hunters see a golden buying opportunity

The PHLX Semiconductor Index SOX lost 12% to stage its worst drop since March 16, 2020, according to Dow Jones Market Data. The Nasdaq Composite Index COMP fell 5.5% to record its worst daily drop since April 2025.

Investors are concerned that the data-center expansion will slow down following the "tsunami" midterm results, Maxim Group analyst Tom Forte told MarketWatch.

"A number of candidates from both parties ran on this message for voters concerned about inflation in electricity prices," he said. "Now we are monitoring to see if the election results actually slow down the expansion."

Rosenblatt Securities analyst Kevin Cassidy said it's unclear how politicians will ultimately act, but for now, "investors don't like uncertainty."

Added Jefferies trading-desk analyst Jeffrey Favuzza: "Many more questions than answers right now."

Election results notwithstanding, the results thus far from third-quarter tech earnings reports haven't set a strong foundation for the AI trade.

"AI stocks were hit from multiple different angles," Morningstar's chief U.S. strategist, Dave Sekera, wrote in a Wednesday note.

Intel's (INTC) earnings report last week disappointed investors with weaker-than-expected revenue projections, leading to its stock getting "walloped," Sekera noted. That fed into overall fears that the data-center buildout would be less robust than investors originally thought. As a result, other semiconductor stocks like Nvidia were also dragged down.

Shares of Intel lost 10% on Thursday.

The market is increasingly focused on how companies actually utilize AI to generate more profits, Sekera added. If investors don't see evidence of that, "then a lot of these stocks, especially those commodity-oriented tech names, are overvalued," he said.

Even Yorkville Ives analyst Daniel Ives, known for his bullish views on the tech sector, acknowledged that he and investors have gotten "more selective" on the AI-exposed stocks that could outperform heading into next year.

Ives said that the companies that will benefit most in the new political environment will be those that can show "tangible" AI use cases and returns on investment, rather than companies in the chip and memory space tied to the buildout of AI infrastructure.

The AI buildout will be "slower and a longer process than it looked like 48 hours ago," he said, as permitting and regulatory challenges could slow the data-center buildout in key states like Texas.

See also: Colleges raced to build massive computer-science departments. Now the boom is turning to bust.

-Hannah Pedone -Christine Ji

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11-05-26 1633ET