Semiconductor shares plunged on Thursday, extending their recent downward momentum.

Investor confidence in the artificial intelligence trade began to waver after Democrats swept both chambers of Congress.

The Philadelphia Stock Exchange Semiconductor Index dropped 9.2%, on track for its largest single-day decline since June.

The index has now fallen roughly 12% this week, putting it on pace for its worst weekly performance since April 2025 and its longest weekly losing streak since April 2025.

Democrats secured control of both the Senate and the House of Representatives in Tuesday's midterm elections, with many voters expressing opposition to data centers.

Texas Governor-elect Gina Hinojosa has already called for an immediate moratorium on data center development.

Data centers are a critical component of AI infrastructure, and any slowdown in spending on them could have a significant impact on chipmakers in the years ahead.

Among individual stocks, NVIDIA (NASDAQ: NVDA) fell as much as 7.5%, marking its largest intraday drop since April 2025.

Advanced Micro Devices (NASDAQ: AMD) plummeted 15%, Micron Technology (NASDAQ: MU) slid 13%, Broadcom (NASDAQ: AVGO) dropped 7.2%, and Intel (NASDAQ: INTC) declined 9.2%.

Qualcomm (NASDAQ: QCOM), which reported weaker-than-expected results the previous day, tumbled 10%, while Arm Holdings Plc (NASDAQ: ARM) also fell 13% following its own earnings report.

The selloff spread from chipmakers to other areas of the AI trade.

Storage device companies Western Digital (NASDAQ: WDC) and Seagate Technology (NASDAQ: STX) each dropped more than 14%, while neocloud companies CoreWeave Inc. (NASDAQ: CRWV) and Nebius Group NV (NASDAQ: NBIS) also posted sharp declines.

Still, not everyone on Wall Street has given up on chip stocks.

Deutsche Bank, for instance, believes the sector remains attractive, particularly relative to the software sector.