What happened?

A number of stocks fell in the afternoon session after incoming Democratic senators called for brakes on the development of artificial intelligence data centers following midterm election results. 

As reported by CNBC, the political rhetoric fueled a widespread sell-off across the chipmaking industry, where companies depend heavily on the rapid buildout of computing infrastructure. Separately, Reuters reported that Micron has paused work on a planned $4.5 billion memory-chip plant in Taiwan amid an extended labor dispute, according to a Bloomberg report cited by Reuters. The pause adds uncertainty around Micron’s capacity expansion, but the report attributed it to labor negotiations—not the debate over U.S. data center construction. 

Calls to halt or slow AI data center construction directly threaten demand projections for high-performance semiconductor components and processing units.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Analog semiconductors company MACOM (NASDAQ: MTSI) fell 15.1%. Is now the time to buy MACOM? Access our full analysis report here, it’s free.
• Processors and graphics chips company Qualcomm (NASDAQ: QCOM) fell 8.3%. Is now the time to buy Qualcomm? Access our full analysis report here, it’s free.
• Semiconductor manufacturing company Entegris (NASDAQ: ENTG) fell 9.4%. Is now the time to buy Entegris? Access our full analysis report here, it’s free.
• Semiconductor manufacturing company Semtech (NASDAQ: SMTC) fell 16.7%. Is now the time to buy Semtech? Access our full analysis report here, it’s free.
• Analog semiconductors company Power Integrations (NASDAQ: POWI) fell 14.4%. Is now the time to buy Power Integrations? Access our full analysis report here, it’s free.

Zooming in on Semtech (SMTC)

Semtech’s shares are extremely volatile and have had 81 moves greater than 5% over the last year. But moves this big are rare even for Semtech and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was about 24 hours ago when the stock dropped 13% on the news that U.S. midterm results shifted control of Congress and the Texas governorship, raising concern over a prospective data-center buildout pause and an end to buildout tax incentives in that state. Texas accounts for roughly 27% of planned U.S. data-center gigawatts, Wells Fargo estimated in figures carried by CNBC. CNBC reported Associated Press projections that both chambers of Congress would change hands, with investors focused on a possible construction pause in Texas. 

The declines came as the broader market advanced. Chip stocks were already under strain after the Nasdaq-100 fell into correction territory in late October, as worries grew that data-center spending growth was slowing, CNBC reported.

Semtech is up 23.1% since the beginning of the year, but at $92.60 per share, it is still trading 53% below its 52-week high of $197.20 from October 2026. Investors who bought $1,000 worth of Semtech’s shares 5 years ago would now be looking at an investment worth $1,026.

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