AI Stocks Plunge as Election Uncertainty Hits Tech Sector
Major U.S. indices and AI chip stocks fell sharply as investors reacted to midterm election results and fears of a slowing AI investment buildout, despite strong quarterly results from key suppliers.
AI stocks are falling after midterm election results triggered a broad market sell-off. The Nasdaq led the decline, dropping 4.64% to 24,543.56, while the S&P 500 fell 3.11% to 7,449.59 and the Dow Jones Industrial Average lost 2.29% to 52,133.85.
Investors don't like uncertainty. Wall Street is now digesting the prospect of a slower AI buildout following the Democrats winning control of both chambers of Congress on November 3. The market volatility index, the VIX, surged 65.26% to 27.45.
AI stock sell-off intensifies on election uncertainty
AI-related semiconductor and storage stocks saw some of the steepest declines. The sell-off came amid policy concerns, including a call from Arizona Representative Yassamin Ansari on November 4 for a pause on advanced AI development and regulation of artificial superintelligence.
| Stock | Decline |
|---|---|
| Sandisk (SNDK) | 18.12% |
| Western Digital Corporation (WDC) | 15.56% |
| Advanced Micro Devices (AMD) | 14.73% |
| Micron Technology (MU) | 14.21% |
| Seagate Technology Holdings (STX) | 13.75% |
| Intel (INTC) | 7.76% |
| Nvidia (NVDA) | 7.50% |
The S&P 500 index itself fell 10.23% on the day. In other markets, the U.S. 10 Year bond yield was 4.845%, crude oil rose 2.38% to $90.22, gold increased 0.64% to $4,099.20, and Bitcoin fell 5.41% to $75,722.71.
SanDisk revenue beats estimates despite market turmoil
Despite the severe stock price reaction, underlying business performance for key AI infrastructure companies remained robust. SanDisk, a pure-play NAND flash company, reported first-quarter fiscal 2027 revenue of $11.03 billion on October 29, beating estimates for a sixth consecutive quarter. Its data center revenue reached $4.80 billion, up 61% sequentially, driven by AI infrastructure demand.
CEO David Goeckeler stated that NAND is the most scalable semiconductor technology. AI inference is widening NAND’s role as longer prompts and reasoning workloads pile up context that has to be stored. SanDisk stock was trading at $968.17, down 7% in morning trading on November 5.
AI supply chain remains robust despite market volatility
Other major suppliers reported strong long-term visibility, suggesting the sell-off was driven by sentiment rather than immediate order cancellations. Micron Technology disclosed on its September 30 earnings call that more than 75% of its fiscal 2027 shipments are already committed, backed by 26 strategic customer agreements covering DRAM and NAND through 2030. Its stock was at $757.15, down 5%.
Western Digital CEO Irving Tan said on an October 22 call that the company has good visibility up to 2030 and 2031 across its top seven customers. Seagate CEO Dave Mosley noted on October 27 that the vast majority of its nearline exabyte supply is now allocated under long-term supply agreements through calendar 2028. Western Digital stock was trading at $307.80, down 5%.
Futurum Group CEO Daniel Newman wrote that if the AI build slows in the U.S., demand outside the U.S. is more than sufficient and forecasts remain intact.
