AMD Tumbles 13% as AI Regulation Fears Hit Chip Stocks After Midterms

AMD stock fell 13% in morning trading Thursday to $424.36, as fears that a Democratic-controlled Congress could tighten AI rules and slow data center construction hit chipmakers across the board. The slide came days after the company reported what CEO Lisa Su called the largest and most profitable quarter in its history.

Democrats won both chambers of Congress in the November 3 midterm elections, and traders are pricing in a tougher policy backdrop for AI. Rep. Yassamin Ansari, a Democrat, called on November 4 for a pause on advanced AI development until adequate regulations are in place. For AMD and Nvidia, that rhetoric raises the prospect of slower data center buildouts just as both companies ramp new systems. A Colorado legislative staff report noted that states have enacted a variety of legislation and executive orders around data centers, with concerns covering energy use, water and electricity costs.

AMD reported Q3 2026 revenue of $13.38 billion on November 3, up 44.7% year over year and ahead of the $13.08 billion consensus. Non-GAAP earnings per share of $2.09 beat the $1.94 estimate, while Data Center revenue rose 97% to $8.55 billion. For Q4 2026, AMD guided to revenue of approximately $17 billion, plus or minus 3%. Su raised the longer-term outlook on the call, saying the company now expects revenue to grow more than 80% in 2027, more than twice the long-term financial model outlined at its Financial Analyst Day last November. Traders are weighing whether election fears, stretched valuations or sector pressure explain the drop, while dip buyers argue the fundamentals are solid.

Nvidia stock fell 7% to $186.81. The company's guidance already excludes China data center compute revenue, so the new worry centers on domestic buildouts. Its next earnings report could offer a fresh read on whether demand is holding up. Intel stock fell 8% to $53.46; the chipmaker is still digesting the tepid forecast it issued on October 29, when it guided Q4 revenue to $15 billion to $16 billion, a sequential decline. Washington is also an Intel shareholder, since the U.S. government holds a significant equity interest that the company has flagged as a risk in its SEC filings. Broadcom stock fell 6% to $304.51; guidance from Broadcom, issued September 2, called for Q4 FY2026 AI semiconductor revenue of $21.7 billion.

Valuation focuses the political question. Nvidia trades at a trailing price-to-earnings ratio of 40x, while AMD carries a price-to-book ratio of 12.67x, and those multiples leave less cushion if Washington slows AI spending. The next test for AMD is whether its Helios ramp outpaces any new AI rules from Congress or state capitals. Su said demand is higher than supply. Permitting fights or a development pause, however, could delay the customer buildouts behind AMD's forecast.

Macro data could add volatility, with oil rebounding, weekly jobless claims out on November 5 and the October payrolls report due November 6.

In delayed trading, AMD was down 17.26%, Nvidia down 9.26%, Intel down 10.33% and Broadcom down 10.43%.