AMD Drops Nearly 15% and Nvidia Falls 7.5% as AI Chip Selloff Hits Nasdaq

AMD expects its AI data center business to more than double by 2027, with CEO Lisa Su citing strong demand. Q3 revenue hit $13.4B, up 45% YoY, driven by Data Center growth. Wedbush analyst Matt Bryson maintains an 'Outperform' rating and $600 price target, citing robust data center spending and AMD's growth trajectory.

AMD CEO Lisa Su addressed AI infrastructure concerns, stating the company has clear visibility into data-center capacity needs through 2027. She highlighted strong demand for AMD's upcoming products and close collaboration with customers. AMD reported Q3 revenue of $13.38 billion, beating estimates, and raised its Q4 revenue outlook to approximately $17 billion.

AMD agreed to acquire Toronto-based Taalas Inc. for approximately $2.9B in a cash-and-stock deal. The acquisition, pending regulatory approval, aims to integrate Taalas's AI-focused semiconductor technology into AMD's accelerator roadmap. Taalas, founded in 2023, specializes in chips tailored to specific AI models, such as Meta's Llama. AMD expects the deal to strengthen its position in the growing AI inference market.

Baird reduced its price target for Qualcomm to $320 from $400, maintaining an Outperform rating. The firm sees 104% upside, citing potential in data center chips for Amazon and another hyperscaler, despite shrinking phone chip sales and rising costs. Qualcomm's stock fell 9.49% on November 5, closing at $156.75.

The Democratic Party won control of the U.S. Senate and House in the midterms, leading to a sharp sell-off in tech stocks. The Nasdaq dropped 5.5% on AI regulation fears, with Nvidia and Micron among the hardest hit. Investors are concerned about tighter data center rules under Democratic control.

U.S. tech stocks declined, with the Nasdaq Composite down over 5% and the Philadelphia Semiconductor Index falling more than 8%. Nvidia, AMD, and Micron saw significant drops due to concerns over potential curbs on data-center construction. Rising oil prices also contributed to the market downturn, according to AFP.