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On Wednesday, Wall Street cheered the outcome of the midterm elections. On Thursday, investors dumped the chipmakers that powered the artificial-intelligence rally, handing the sector its worst session since the COVID-19 crash.

The iShares Semiconductor ETFell 12.8%, its steepest one-day drop since March 2020.

The Philadelphia Semiconductor Index (SOX), the industry’s benchmark, sank 12.3%, its worst day since March 16, 2020. The Nasdaq 100 lost 6.4%, also its worst day since March 2020.

The rout pushed the damage across the sector into new territory.

Of the 30 stocks held by SOXX, 28 now trade at least 20% below their record closing highs, the common threshold for a bear market. Half of them, 15 in total, have lost more than 50% of their value from their peaks.

Only Texas Instruments Inc.and Analog Devices Inc.have stayed out of a bear market. Analog Devices is barely holding on, at 19% below its June record.

The Biggest Holdings Are Not Spared

The four largest positions in the fund are Advanced Micro Devices Inc., NVIDIA Corp. , Broadcom Inc. and Micron Technology Inc.. Together, they make up about a third of SOXX, and all four are in a bear market.

The 28 stocks in a bear market account for roughly 90% of the fund’s assets.

Micron sits 46% below its June closing high after falling 17.5% on Thursday, its worst day since March 16, 2020. AMD dropped 17.3% and now trades 38% below its October peak.

Nvidia is the mildest case among the fund’s leaders, 24% below its record close.

The deepest drawdowns sit among the names most tied to AI infrastructure. Cerebras Systems Inc. has lost 74% since its record close in May. Intel Corp., Credo Technology Group Holding Ltd., Astera Labs Inc. and Arm Holdings Plc are each down about 62%–63%.

Chip equipment makers were hit just as hard. Lam Research Corp. , KLA Corp. and Applied Materials Inc. all sit more than 55% below their June peaks. Lam fell 16.4% on Thursday, its worst session since March 2020.

Closing prices on Nov. 5, 2026. SOXX holdings as of Nov. 4, according to iShares. *From its 2026 peak; Tower’s record close dates to March 2000.

How a Bad Earnings Night Became a Sector-Wide Rout

The selling started with Qualcomm Inc. and Arm, which reported disappointing results after Wednesday’s close.

Qualcomm’s problem sits in its new data center business. According to Cantor Fitzgerald analyst C.J. Muse, the December-quarter outlook implies pretax margins near minus 15% for the unit. Until the company shows a path to profitability there, Muse said in a note late Wednesday, the stock will likely remain in the “show-me category.”

From there, the selling spread across the sector.

“What looked to be a down-day due to disappointing earnings after the close yesterday from Qualcomm and Arm Holdings has turned into a rout across the entire market,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in emailed comments.

According to Zaccarelli, the narrative flipped from “AI changes everything” to fears that a Democratic Congress will make new data centers far harder to build.

Adam Turnquist, chief cross-asset strategist at LPL Financial, said in emailed comments that the AI trade “has suffered significant technical damage.”

Not Everyone Sees a Bargain

“Even with the Nasdaq correction, valuations in the tech sector still remain way too high, and this is not a buying opportunity by any means,” David Bahnsen, chief investment officer at The Bahnsen Group, said in emailed comments.

Turnquist sees one signal pushing back against the panic. Copper, a key input for data center construction, is still trading above its rising 200-day moving average. In his view, that suggests some of the selling across AI-exposed stocks may be overdone.

Still, he said volatility has not yet reached the extremes that have historically marked capitulation points.

For now, the numbers show how far the chip trade has unwound, not where it bottoms.