Chip Stocks Rebound After Worst Sell-Off Since 2020
Chip stocks rebounded Friday, with the SOX index up 4% after a 12% Thursday plunge, led by AMD and Intel gains.
Chip stocks rebounded on Friday after suffering their worst sell-off since 2020. The PHLX Semiconductor Index (^SOX) bounced 4% following a 12% plunge on Thursday, according to Yahoo Finance.
Shares of Intel (INTC) jumped about 7%, erasing part of their 10% slide in the prior session. AMD (AMD) rebounded 11% after suffering a 17% fall. Nvidia (NVDA), which declined 9% in the prior session, jumped more than 2%.
Semiconductors bounced back after much of the AI trade was hammered on Thursday as investors digested what a Democratic win in Congress means for the data center build-out in the US, CNBC reported. Memory and storage names Sandisk (SNDK), Micron Technology (MU) and SK Hynix (SKHY) also rebounded, along with Qualcomm (QCOM) and Arm Holdings (ARM).
The Thursday rout came as Democrats won control of Congress, prompting investors to reassess the data center build-out. Nvidia fell 9.3%, AMD shed 17.3%, Microsoft 3.6%, Micron 17.5%, Broadcom 10.4%, Tesla 10.8% and SpaceX 9.1% on Thursday, according to CNBC. Neoclouds were hit particularly hard: Nebius dropped 15%, Iren fell 17% and CoreWeave 10%.
The election rout landed on an AI trade already under pressure from high interest rates, heavy capital spending and questions about returns, CNBC said. Between January 2024 and May 2026, at least 46 AI data center projects across 20 US states, representing more than $170 billion in announced investment, were blocked, withdrawn or stalled following community opposition, according to research by the International Data Center Authority cited by CNBC.
Goldman Sachs estimates that AI-related capital spending could total about $7.6 trillion from 2026 through 2031 across computing, data centers and power, CNBC reported. Dan Ives said the midterms will weigh on investors' minds, according to CNBC.
In delayed trading, Nvidia was up 2.78% at $186.64, AMD up 11.04% at $449.04 and Intel up 7.71% at $56.28. By Friday morning US tech stocks were showing signs of recovery, but the market blip is a warning of potentially rougher roads ahead for the AI boom in America, CNBC said. The rebound reflects bargain hunting after Thursday's rout, but the underlying question of how a Democratic-controlled Congress affects data center construction remains unresolved.