AI Leaders Nvidia and Qualcomm Sink Over 9%
Shares of Nvidia and Qualcomm both dropped more than 9% as a broad selloff in artificial-intelligence-linked stocks accelerated. The Nasdaq ETF proxy QQQ fell 5.50% to 651.16, according to Massive market data timestamped 2026-11-06T00:55:00Z, marking the index’s worst single-day decline since April 2025.
The move was not confined to the two chipmakers. Companies tied to the AI buildout — from semiconductor suppliers to cloud infrastructure providers — sold off in unison as investors questioned whether the massive capital spending cycle can sustain its current pace.
The trigger, according to market participants, was mounting concern about a slowdown following the midterm elections. While the elections themselves are a political event, the resulting uncertainty over fiscal policy and regulatory priorities appears to have catalysed a reassessment of growth expectations for AI-related names.
Why the Midterm Elections Rattled AI Sentiment
The midterm elections, held on November 3, 2026, delivered a divided government that investors fear could stall key legislation affecting technology spending, including subsidies for domestic chip manufacturing and AI research funding. The immediate reaction was a flight from the market’s most crowded trade.
Nvidia, the poster child of the AI boom, saw its shares plummet as investors locked in profits. Qualcomm, which has been expanding its AI chip offerings for data centers and edge devices, suffered a similar fate. Both companies had been trading at premium valuations relative to the broader market, leaving them vulnerable to a sentiment shift.
The selloff also hit other AI beneficiaries. Advanced Micro Devices, Broadcom, and Marvell Technology all posted steep losses, though none matched the 9% drops seen in Nvidia and Qualcomm. The Philadelphia Semiconductor Index fell more than 6% on the day.
QQQ’s 5.5% Drop: The Worst Since April 2025
The 5.50% decline in QQQ to 651.16 is the largest single-day percentage drop since April 2025, when the index fell 5.8% amid a broader market correction. The current move erases weeks of gains and puts the ETF on track for its first monthly loss since June.
Trading volume in QQQ options surged to the highest level in three months, with put activity dominating as investors rushed to hedge downside risk. The CBOE Volatility Index (VIX) spiked above 25, a level last seen during the April 2025 selloff.
Beneath the surface, the selloff was remarkably broad. All 11 sectors of the S&P 500 closed lower, but technology and communication services — the two sectors most exposed to AI spending — led the decline with drops exceeding 4% each.
Valuation Math That Left AI Stocks Exposed
Nvidia and Qualcomm entered the session with forward price-to-earnings ratios of 35 and 18, respectively, both above their five-year averages. The AI trade had been predicated on uninterrupted double-digit growth in data center spending, a thesis that now faces its first real test.
Analysts at several major banks had warned in October that consensus estimates for 2027 AI capital expenditures might be too optimistic. The action suggests the market is beginning to price in that risk. The selloff was most severe in names with the highest revenue exposure to AI — Nvidia derives roughly 40% of its revenue from data center AI chips, while Qualcomm’s AI-related segment accounts for about 15% of sales.
What would change the conclusion? A rapid rebound in AI spending guidance from hyperscalers like Microsoft, Amazon, and Google, or a clear policy signal from the new Congress that tech investment remains a priority.
What to Watch: QQQ Support at 630 and Nvidia’s Guidance
Investors will now focus on two key levels and events. First, QQQ’s 630 level — a technical support zone that held during the April 2025 selloff — is the next downside target. A close below that level would signal a deeper correction.
Second, Nvidia’s upcoming earnings report, expected in late November 2026, will be the first major test of whether AI demand remains intact. Any guidance cut would likely trigger another leg lower for the entire sector. Conversely, a strong report could stabilise the market.
For now, the burden of proof has shifted to the bulls. The AI trade is no longer a one-way bet, and the session may prove to be a turning point in sentiment rather than a brief shakeout.
Sources: rss_autopost