Chip and AI Equities Retreat Following Congressional Sweep as Deal Scrutiny Mounts

A broad retreat hit semiconductor and artificial intelligence hardware equities during the trading week ending Nov. 6, 2026, as investors assessed the durability of data center capital spending plans following Democratic victories in both chambers of Congress, according to weekly market reporting syndicated by Yahoo Finance (https://finance.yahoo.com/markets/stocks/articles/investing-com-stocks-week-191819455.html?.tsrc=rss).

The shift in political control raised investor questions over how national infrastructure, tech policy, and high-scale computing investments will fare over the upcoming legislative session, putting immediate downward pressure on silicon hardware and manufacturing equipment suppliers.

Memory and equipment vendors registered the deepest drawdowns across the semiconductor complex. SanDisk led sector losses with a 26.9% decline, followed by Micron with a 21.5% drop. Processor architecture designer Arm fell 16.1%, while equipment makers Lam Research, Applied Materials, and KLA dropped 15.4%, 14.1%, and 12.2%, respectively. High-performance networking and computing stalwarts also lost ground, with Broadcom dropping 9.6% and Nvidia shedding 8.3%.

The broader hardware pullback coincided with a steep slide in Marvell Technology and optical component maker Lumentum after Marvell announced an agreement on Nov. 2 to acquire Lumentum in an all-stock transaction valued at $115 billion. The transaction structure links Lumentum's equity to Marvell through a fixed ratio of 4.5 Marvell shares for each Lumentum share. Over the course of the week, Marvell sank 32.6% while Lumentum fell 38.4%, including an 18.7% drop on Thursday. Wall Street research desks moved quickly to downgrade both names: TD Cowen lowered Marvell to Hold and cut its price target to $175 from $350; B. Riley downgraded Lumentum to Neutral, reducing its target from $1,142 to $770; and Stifel moved to a Hold rating on Lumentum with an $806 target.

Regulatory uncertainty following the congressional sweep also weighed on Elon Musk's companies, pulling Tesla shares down 10.3% over the week while SpaceX equity dipped 2.2%. In consumer tech, digital sports entertainment firm DraftKings fell 24% on Friday after third-quarter results trailed expectations. The company reported a loss of $0.53 per share, missing consensus estimates by $0.17, on revenue of $1.33 billion versus the $1.41 billion consensus. Full-year revenue guidance of $6.35 billion to $6.55 billion also missed the $6.65 billion expectation. BofA Securities analyst Shaun Kelley trimmed his target from $27 to $23 while retaining a Buy rating, citing investor hesitation around prediction market investments amid sports contract regulatory scrutiny.

In contrast to hardware weakness, selected enterprise and application software providers moved higher on earnings beats and corporate activity. AppLovin surged 70% over the week after third-quarter revenue of $2.18 billion and earnings of $4.30 per share exceeded expectations of $2.08 billion and $4.04 per share, alongside raised guidance.

Unity Software advanced 39% across the week following third-quarter results where earnings reached $0.44 per share against the $0.03 consensus, with revenue of $622 million surpassing the $565.82 million projection and fourth-quarter guidance set above Wall Street estimates. Trading was further fueled by reporting from Reuters that Unity has held takeover discussions with a consortium featuring 8% shareholder Silver Lake and Saudi Arabia's Public Investment Fund—the same group that finalized a $55 billion buyout of Electronic Arts in August. Discussions reportedly involved a valuation around $25 billion prior to the post-earnings jump, with Unity engaging an investment bank to evaluate potential paths.