What happened?
A number of stocks fell in the afternoon session after incoming Democratic senators called for brakes on the development of artificial intelligence data centers following midterm election results.
As reported by CNBC, the political rhetoric fueled a widespread sell-off across the chipmaking industry, where companies depend heavily on the rapid buildout of computing infrastructure. Separately, Reuters reported that Micron has paused work on a planned $4.5 billion memory-chip plant in Taiwan amid an extended labor dispute, according to a Bloomberg report cited by Reuters. The pause adds uncertainty around Micron’s capacity expansion, but the report attributed it to labor negotiations—not the debate over U.S. data center construction.
Calls to halt or slow AI data center construction directly threaten demand projections for high-performance semiconductor components and processing units.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Memory semiconductors company Seagate (NASDAQ: STX) fell 14.8%. Is now the time to buy Seagate? Access our full analysis report here, it’s free.
- Memory semiconductors company Western Digital (NASDAQ: WDC) fell 17%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
- Analog semiconductors company Vishay Intertechnology (NYSE: VSH) fell 15.2%. Is now the time to buy Vishay Intertechnology? Access our full analysis report here, it’s free.
- Analog semiconductors company Impinj (NASDAQ: PI) fell 7.9%. Is now the time to buy Impinj? Access our full analysis report here, it’s free.
- Processors and graphics chips company Allegro MicroSystems (NASDAQ: ALGM) fell 14.3%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free.
Zooming in on Western Digital (WDC)
Western Digital’s shares are extremely volatile and have had 79 moves greater than 5% over the last year. But moves this big are rare even for Western Digital and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 8.1% on the news that major artificial intelligence deals and landmark financing agreements reinforced investor confidence in sustained technological demand as reported by AP News.
Market sentiment received a major boost following news that Broadcom obtained $63 billion in bank financing to develop proprietary artificial intelligence chips for Anthropic. The massive commitment, paired with Anthropic filing for an initial public offering and Meta launching an equity offering, signaled to Wall Street that capital expenditure across the technology landscape remains robust. For chipmakers and hardware designers, these multi-billion-dollar transactions demonstrate that major tech players continue to channel enormous financial resources into specialized infrastructure.
Rather than slowing down, corporate appetite for computing power is accelerating, helping lift semiconductor shares and providing essential support to broader equity benchmarks such as the S&P 500.
Western Digital is up 43.5% since the beginning of the year, but at $269.94 per share, it is still trading 63.8% below its 52-week high of $746.23 from June 2026. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $4,795.
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