AMD leads chip selloff as AI regulation fears grow

AMD fell 13% in morning trading despite reporting its largest and most profitable quarter, as investors weighed potential restrictions on AI development and data center construction. NVIDIA declined 7%, Intel dropped 8% and Broadcom lost 6%, extending a broader semiconductor selloff.

Democrats won both chambers of Congress in the November 3 midterm elections, raising expectations of tighter oversight. Rep. Yassamin Ansari called on November 4 for a pause on advanced AI development until adequate regulations are established. State-level concerns about energy consumption, water use and electricity costs are adding uncertainty around the infrastructure expansion supporting chip demand.

AMD reported Q3 2026 revenue of $13.38 billion, up 44.7% year over year, while Data Center revenue rose 97% to $8.55 billion. CEO Lisa Su said revenue should grow more than 80% in 2027 and maintained that demand exceeds supply. The selloff highlights the tension between strong operating results and policy uncertainty: permitting disputes or development restrictions could delay customer projects underpinning those forecasts. Elevated valuations leave chipmakers with less protection if AI spending slows, while Intel also faces pressure from its weak revenue outlook.