Nasdaq Suffers Worst Day in 18 Months as AI Chip Stocks Collapse

By Olivia Hart

Sandisk shares closed down 22% on Thursday — the single worst performance in the S&P 500 — as a chip-stock selloff dragged the Nasdaq Composite to its worst day in a year and a half.

The rout was broad and severe across the semiconductor complex. Advanced Micro Devices, Micron Technology and Western Digital each lost more than 17%. Seagate Technology Holdings shed 16%. Even Nvidia, the industry's largest player, ended the session down 9%.

Put plainly: an investor holding a basket of these names lost between roughly a tenth and a fifth of their value in a single trading session. The Nasdaq's drop was its steepest in about 18 months, according to the market data underpinning the selloff.

Why did chip stocks fall so hard?

The trigger, according to the reporting, was political rather than technical. Wall Street spent Thursday digesting the prospect of a slower artificial-intelligence buildout in the wake of the midterm election results.

The logic runs through spending. The AI boom of the past two years has been fueled by massive capital expenditure on data centers, memory and processors — spending that lifted suppliers such as Micron, Seagate, Western Digital and Sandisk alongside the better-known chip designers. If the election results change the policy environment or the appetite for that buildout, memory and storage makers stand to lose the most, because their revenues depend directly on hardware demand.

As one market participant put it: "Investors don't like uncertainty."

The statement is worth taking at face value. A 22% single-day decline in Sandisk is not a verdict on the company's current earnings; it is a repricing of what investors fear might not happen next.

How big were the losses?

The damage, ranked by Thursday's closing declines:

• Sandisk (SNDK): down 22% — the worst performer in the entire S&P 500
• AMD: down more than 17%
• Micron Technology (MU): down more than 17%
• Western Digital (WDC): down more than 17%
• Seagate Technology (STX): down 16%
• Nvidia (NVDA): down 9%

The pattern is telling. The storage and memory names — Sandisk, Western Digital, Seagate, Micron — fell hardest, while Nvidia, whose franchise spans more of the AI computing stack, declined by half as much. The market, in other words, punished the companies most exposed to a hardware buildout slowdown first.

What does the selloff signal for AI investing?

One session does not make a trend, and the source material does not claim the AI buildout has actually slowed — only that investors now see a risk that it might. That distinction matters. Nothing in Thursday's move reflects reported deterioration in chip demand, earnings guidance or order books from the companies themselves.

What it reflects is the premium that AI-related stocks have carried. Stocks priced for uninterrupted growth are vulnerable to any signal, political or otherwise, that the growth could decelerate. A midterm election result was enough of a signal to erase nine months of relative confidence in a single afternoon for some of these names.

The caveat cuts both ways, and the source is silent on both points. It does not say the election outcome will in fact curtail AI momentum, and it does not rule out a rebound once the policy picture clarifies.

For now, the takeaway is simple: the AI trade has moved from a bet on technology to a bet on politics, and on Thursday that bet went badly for chip investors.

The next test will be whether companies' actual spending commitments confirm or contradict the fear that drove this selloff.