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AI Stocks Sink: Chips Drop 8%, Nasdaq Falls 4%

AI Build-Out — Chip Stocks Sink 8%, Nasdaq Drops 4% and the Fear Gauge Jumps 43%

AMD falls 13.5% two days after strong results, Vertiv 12.9% and Nebius 14.2%. A call for a pause on advanced AI, a Texas governor-elect who wants a data-center moratorium and a Microsoft spending gap tied to a Texas site all hit the companies that build AI.

In this edition

SPY QQQ RSP DIA IWM AMD MU QCOM

The Midday 10 Thu, Nov 5, 2026 ~60 seconds 12:30 ET

The sell-off in the companies that build AI enters its second day in New York and gets worse. The chip fund SMH falls 8.2%, the Nasdaq 4.1% and the S&P 500 3.1%, while the VIX, Wall Street's fear gauge, jumps 43% to 23.7 after touching 28.1. Washington is the trigger: a Democratic lawmaker calls for a pause on advanced AI development, Texas has elected a governor who wants a moratorium on data centers, and a report ties a $5 billion gap in Microsoft's spending to delays at a Texas site. The companies that use AI fall far less, Apple only 1.1%, and AppLovin jumps 29.5% after its results.

US midday, quotes as of 11:47 ET (delayed)

  1. The indices — Nasdaq down 4%, the fear gauge up 43%
  2. Chips — AMD sinks 13.5% two days after beating
  3. Data-center connections — Astera Labs drops 15.9%
  4. Power for data centers — a second day down
  5. AI server renters — Microsoft spent $5 billion less than planned
  6. Washington — from tariffs to AI rules
  7. ETF board — momentum sold, low volatility holds
  8. AppLovin — up 29.5% against the tape
  9. The AI users hold — Apple down only 1.1%
  10. After the close — Cloudflare, IREN, Applied Optoelectronics

The ten lines

  1. 1

    LEVEL The indices — Nasdaq down 4%, the fear gauge up 43%

    SPYQQQRSPDIAIWM

    The S&P 500 falls 3.1% to 7,453.75 after touching 7,394.02, the Nasdaq Composite 4.1% to 24,682.67 and the Dow 2.3% to 52,107.34. The VIX jumps from 16.61 to 23.68, a rise of 42.6%, after touching 28.09 in the first hour. The Nasdaq 100 fund QQQ is down 4.7%, the equal-weight S&P 500 fund RSP only 2.2%: the selling is concentrated in the largest technology names. SPY at 743.04, DIA at 520.35 and IWM at 274.77 all trade below their 50-day averages (767.06, 521.05 and 283.19), which all three held on Wednesday.

  2. 2

    DOWN Chips — AMD sinks 13.5% two days after beating

    AMDMUQCOMARMTSMNVDAAVGO

    AMD falls 13.5% to 422.80, although on Tuesday it reported quarterly revenue of $13.38 billion, up 44.7% on the year, guided to about $17 billion for the current quarter, and Lisa Su said she expects revenue to grow more than 80% in 2027 (247 Wall St.). Results no longer carry the stock; politics does. Micron falls 11.5% to 703.45, Qualcomm 11.1% and Arm 11.1% after Qualcomm's warning on memory and packaging costs, TSMC 8.1% to 363.72, Nvidia 6.8% to 186.62 and Broadcom 6.7% to 303.73.

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  4. 3

    DOWN Data-center connections — Astera Labs drops 15.9%

    ALABMRVLANETAAOI

    The suppliers of the chips and cables that connect AI servers fall hardest: Astera Labs drops 15.9% to 187.75, Marvell 11.2% to 141.89 and Arista 8.5%. Applied Optoelectronics, which reports after the close, falls 17.1% to 49.16. These are the stocks that rise most when spending on data centers grows faster, and fall most when the market doubts it will.

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Ten lines on the US midday tape, not advice — an investment diary. Published every trading day at 12:30 ET. See The Morning 10 and the Daily Pulse.