AI Selloff Widens to Neoclouds and Power Suppliers as AMD Falls 13% Days After a Record Quarter

Since Wednesday's post-midterm rally flipped into a chip rout, the AI selloff has widened as of 11:30 a.m. ET Thursday, Nov. 5. It now hits neoclouds, memory makers, data center operators and the power-equipment suppliers behind the build-out.

How deep the slide runs

At 11 a.m. ET, the Nasdaq 100 was down 5% and about 13% below its latest high, officially in a correction, according to Business Insider's tally. The Dow, coming off its best day since the post-Liberation Day rally in 2025, had dropped more than 1,000 points.

CNN reported the Nasdaq Composite fell as much as 5.5% at one point, putting it on pace for its worst day in five months. Those figures are intraday and moving.

The damage was uneven. Microsoft was down about 2% and Meta about 3%, after hyperscalers rose Wednesday on hopes that AI capital spending would slow. Business Insider listed the heaviest hits among:

• Sandisk, down 14%
• Nebius, down 13%
• IREN, down 12%
• Micron and Vertiv, each down 11%
• CoreWeave, down 9%
• Tesla, down 9%
• Intel, down 8%

The Roundhill Neocloud ETF fell 10%, and the Roundhill Memory ETF fell 6%.

AMD: record quarter, worst reaction

AMD was down 13% to $424.36 in morning trading, according to 24/7 Wall St. That is the sharpest drop among the big chip names, and it came days after the company's best quarter.

AMD reported third-quarter revenue of $13.38 billion on Nov. 3, up 44.7% from a year earlier and ahead of the $13.08 billion consensus. Non-GAAP earnings per share were $2.09 against a $1.94 estimate. Data center revenue rose 97% to $8.55 billion.

CEO Lisa Su guided fourth-quarter revenue to roughly $17 billion, plus or minus 3%. She said AMD now expects revenue to grow more than 80% in 2027, which she called more than twice the long-term model the company laid out last November.

Nvidia was down 5% to 7% depending on the hour, trading near $186.81 in the 24/7 Wall St. snapshot. Broadcom was down 5%.

Qualcomm's drop of roughly 9% to 10% has a company-specific cause. It disappointed investors with its earnings outlook, citing weak smartphone demand and declining Apple-related revenue.

The political case being priced in

Democrats won both chambers of Congress in the Nov. 3 elections. Traders are weighing whether Democratic lawmakers and state officials will tighten rules on data centers and AI.

Jefferies analysts called the Democratic sweep a "Worst-Case Near-Term Scenario" for the AI trade and cut their outlook for data center capacity through the end of the decade. UBS strategists estimate about 30% of expected U.S. data center capacity additions in 2028 could face delays, according to Reuters.

Rep. Yassamin Ansari, a Democrat, called on Nov. 4 for a pause on advanced AI development until adequate regulations are in place. A Colorado legislative staff report noted that states have passed a range of data center laws and executive orders over energy use, water and electricity costs.

Texas is the pressure point. Wells Fargo says the state holds 27% of planned U.S. data center capacity. Republican Gov. Greg Abbott told the industry days before the election that data center companies had "dug their own grave" by failing to win over local communities.

Startup Fortune reported that Democrat Gina Hinojosa won the Texas governorship on a data-center moratorium platform. Bank of America strategist Michael Hartnett had flagged that race beforehand as a referendum on cost of living versus AI data centers.

The other side of the trade

Not everyone reads this as a verdict on demand. Dip buyers cited by 24/7 Wall St. argue AMD's fundamentals are solid. Bulls call the Nvidia drop an overreaction, saying projects can move to friendlier locations and that power, cooling and networking suppliers keep benefiting either way.

Business Insider's own read is that Thursday's moves look driven by a broad risk-off retreat from AI exposure. It also notes traders had already been selling hyperscalers after earnings, even when companies beat on profit and promised more spending discipline for 2027.

The selling is not universal. AppLovin jumped after stronger-than-expected quarterly results and a bigger buyback.

What remains unsettled

No data center project was cancelled Thursday. The AI debt market was already showing strain, with investors demanding higher yields from borrowers heavily exposed to data center construction, according to KuCoin's market report.

Smaller operators that rely on outside financing for chips and facilities are most exposed to higher borrowing costs and permitting delays. The open question is whether the UBS delay estimate and Jefferies' lower capacity outlook show up in actual spending plans, or only in share prices.