Chip stocks plunged. Their biggest customers are still spending.

Qualis weekly investment commentary | 8 November 2026

The US midterms exposed a striking divide in the AI trade. Between election-day close and Friday, five major chip and equipment suppliers fell 12.1% on average, while four of their largest infrastructure customers gained 1.3%. The PHLX Semiconductor Index lost 11.4% over the same period, even after Friday’s rebound. These are US dollar price moves, and the two groups are illustrative, equally weighted comparisons. The gap is worth examining because the companies buying the equipment and the companies selling it are exposed to different risks. Semiconductor index data.

Why buyers and suppliers moved apart

A delay affects the two sides of an order differently. A cloud provider with spare capacity elsewhere may be able to move workloads or defer spending. A supplier expecting to ship equipment into the delayed site may have to wait longer to book the sale. An incumbent with capacity already up and running may even benefit if competing projects take longer to open. These are plausible explanations for part of the divide. The wider sell-off and Friday’s partial reversal suggest that positioning and market sentiment also mattered. Reuters on project exposure · Reuters on Friday’s rebound.

Texas faces tighter scrutiny while Washington considers faster permits

Texas is a real source of uncertainty. Governor-elect Gina Hinojosa has called for safeguards for residents, and new approvals could remain paused while legislators consider the rules. CoreWeave has offered to work with her incoming administration on existing and future projects. Alabama offers a different approach. Tommy Tuberville’s published plan welcomes investment on terms that put infrastructure costs on developers and protect households. Developers may have choices about where they build, although moving a project takes time and can add cost. Texas Tribune · CoreWeave letter coverage · Alabama policy plan.

Washington added a new piece of evidence over the weekend. On Saturday, two Republican and two Democratic senators released revised text for the Bipartisan American Affordability and Jobs Act. The proposal would shorten federal reviews for energy infrastructure and require data centres to cover their associated transmission costs. The Senate has scheduled a procedural vote for Monday 9 November at about 10:30 pm UK time. It takes 60 votes to clear this hurdle. That would move the legislation towards debate, with passage and enactment still ahead. Senate amendment · Senate schedule.

If enacted, the bill could help some projects secure power sooner. State and local approvals, grid connection schedules and the cost of bringing power to each site would still shape delivery. UBS estimates that around 30% of expected US data-centre capacity additions in 2028 could be at risk from potential construction pauses. That measures exposure to possible disruption. The eventual split between delays, relocations and cancellations will determine how much of that risk reaches suppliers’ earnings. UBS estimate via Reuters.

What customers are actually buying

Amazon reported 39% year-on-year AWS sales growth and a $578 billion backlog spanning core cloud and AI workloads. Alphabet reported that Google Cloud revenue more than doubled, helped by enterprise AI, core cloud services and sales of its custom chips. On the supplier side, AMD reported 97% year-on-year growth in data-centre revenue. These are different measures, but together they show growth in both cloud services and equipment sales. Amazon · Alphabet · AMD.

The most relevant post-election demand evidence came from OpenAI CFO Sarah Friar. She told CNBC on Friday that its enterprise business had doubled from the previous quarter and that the election had made no dramatic difference to the company’s plans. That tells us how one major customer sees its own demand and investment plans. The next test is whether that demand converts into equipment deliveries and revenue on the schedules investors expect. CNBC interview.

What lower prices change

Citadel Securities put the Nasdaq-100 at around 19 times forward earnings on 3 November, near the bottom of its five-year range. That gives investors a lower starting valuation than they had earlier in the cycle. Its significance depends on where earnings estimates settle. A lower share price offers a margin for error only to the extent that profits hold up. Citadel Securities.

Micron illustrates a second effect of lower prices. At Friday’s close, the same buyback budget could purchase roughly 50% more shares than at the 8 October close. If Micron repurchases shares and its net share count falls, the same profit is spread across fewer shares, increasing earnings per share. The authorisation gives Micron discretion over whether and when to buy. The earnings effect depends on execution, the price paid and any offsetting share issuance. Micron filing · Price history.

Friday shows how quickly buyers can return after a sharp sell-off. The semiconductor index gained 4.2%, recovering part of Thursday’s losses. Monday’s Senate vote is an early test of whether bipartisan permitting reform can advance. For chip suppliers, the more durable test is what customers do next. If orders hold, projects connect to power and earnings estimates prove resilient, last week’s falls may have created more attractive entry points across parts of the AI supply chain. Reuters market report.

This article is for information only and does not constitute investment advice or a personal recommendation. Capital is at risk. Past performance is not a reliable indicator of future results.