Why AMD stock is down 12% on November 5 as chip stocks slide

AMD stock is down about 12% on Thursday, November 5, in a sell-off of chip and AI data center stocks that Reuters ties to Democratic midterm wins and to doubts about AI spending. Yahoo Finance showed AMD at $428.92 at 14:52 UTC, down 12.2% from Wednesday's close of $488.78. AMD itself has announced nothing that explains the drop.

AMD fell much further than most of the group. No outlet we read says why, so this article gives the reasons for the sector's fall and marks what is not explained.

Why chip stocks are falling

Reuters reported on the morning of November 5 that AI and data center stocks slipped after the Democrats' sweeping midterm victory. Investors fear tougher scrutiny of the data center industry, which could slow construction as public opposition to new sites grows. Reuters cites UBS analysts, who estimate about 30% of expected U.S. data center capacity additions in 2028 are at risk from possible construction pauses.

Reuters also says investors are asking whether heavy AI infrastructure spending will pay off. Ted Parkhill of Incline Investment Management told Reuters: "The market's moving from the promise of AI to the price of AI."

CNBC's live blog, as we read it on November 5, said the Nasdaq Composite was down 2.3% and Nvidia and Broadcom were each down 4%. CNBC says Qualcomm fell 9% on a weaker outlook and Nebius fell 5%. The Reuters piece does not name AMD, and neither does CNBC's.

What AMD has said

AMD reported third-quarter results on November 3. Revenue was $13.38 billion, up 45%, and data center revenue was up 97%. Our AMD earnings article has the figures, from AMD's release. AMD's investor page lists no press release after that one, and its SEC filing list shows no 8-K since November 3.

So the drop does not follow a new AMD announcement. AMD closed at $488.78 on November 4, up about 1% on the day, per Yahoo Finance data.

AMD's price this week

This is the second large drop in a week. On October 30 AMD fell 10.9% in a sell-off linked to Intel and Amazon results, which we covered in why AMD stock fell on October 30.

What we don't know

We could not find a source that explains why AMD fell about three times as much as Nvidia. The November 5 price is an intraday reading and will have changed by the close. Related: why CoreWeave stock fell on November 4 and Qualcomm's results.

What to watch

AMD has not announced a date for its fourth-quarter report. Until then, the market will follow what a Democratic Congress and states such as Texas do about data center permits.