Stocks of Qualcomm, Micron, Sandisk and Arm Holdings fall, leading chip sector to decline

Chip stocks fell on Thursday, extending declines from the previous session. Despite a broader market rally Wednesday after Democrats won the midterm elections, semiconductor stocks fell on the threat that tighter regulations could slow data center construction.

Semiconductor stocks, which have driven AI trading higher this year, have been volatile since the summer. The PHLX Semiconductor Index (^SOX) fell more than 5% in early trading, bringing the index’s year-to-date gains to around 35%.

The declines were led by Qualcomm (QCOM), which issued disappointing profit forecasts, signaling that more expensive components are weighing on the maker of smartphone processors.

Shares of Arm Holdings (ARM) also fell after the chip designer issued revenue guidance that, while slightly above consensus, failed to impress investors who priced higher amid the AI ​​boom.

Micron Technology (MU) stock also fell after the memory chip maker suspended plans for a factory in Taiwan due to labor unrest. Sandisk (SDNK) slipped 6%, extending declines from 7% the previous session.

SK Hynix (SKHY) was also trading lower in pre-market trading after the South Korean memory maker’s shares fell overseas, alongside Samsung Electronics (005930.KS).

At the same time, shares of U.S. chipmaker Intel (INTC) fell nearly 5%, while those of AMD (AMD) plunged 9%. Nvidia (NVDA) also extended its declines from the previous session.