Quick Read
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AMD plunged 13% as election-driven fears of AI spending limits dragged SMH down 7% and SOXX down 7%, despite a strong earnings beat.
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QQQ carries 4% of its assets in AMD, while VOO's 519 holdings still leave 38% in information technology.
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Owning more chip names offers little protection, because SMH's top 10 holdings make up about 70% and fall together on regulation fears.
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Read More: Avoid these 13 retirement mistakes before they derail your future (sponsor)
Advanced Micro Devices( NASDAQ:AMD ) fell 13.08% to $424.85 in Thursday morning trading, down from $488.78. The drop came on a second straight day of chip and AI-linked selling after the Democratic sweep in the midterm elections. Reuters reported that chip stocks fell on Thursday under pressure from concern about possible restraint on the AI buildout from a Democrat-controlled US Congress. AMD's only press release of the day covered a quantum error correction co-design platform, so the election backdrop is the clearest driver. If you own AMD through a fund, here is how far the drop reaches.
The selloff came two days after a strong quarter. On November 3, AMD reported non-GAAP EPS of $2.09 against a $1.94 consensus. Revenue came in at $13.377B, ahead of estimates, and fourth-quarter guidance calls for about $17.0B. Even so, the stock is down 26.55% over the past week. It is still up 98.38% year to date.
Chip ETFs Taking the Biggest Hit From AMD
The VanEck Semiconductor ETF( NASDAQ:SMH ) held AMD at a 5.63% weight in its most recent filing, dated June 30, 2026. That position was worth $4.35 billion. SMH fell 7.04% to $468.76. At that weight, AMD alone accounts for about 0.74 percentage points of the fund's decline.
The iShares Semiconductor ETF( NASDAQ:SOXX ) fell 7.47% to $138.92.
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Why the Damage Compounds Inside Semiconductor Funds
AMD's share of SMH's drop is small. Most of the decline comes from the other chipmakers falling in the same policy-driven selloff. SMH's top 10 holdings made up about 70.24% of the fund. Its largest position, the leading AI GPU designer, carried a 17.55% weight. Eight more names, including chip equipment makers, a memory producer and a networking chip supplier, sat between 5.04% and 9.29%. When regulation fears hit the whole AI buildout at once, those positions fall together, and owning more names offers little protection. One way to spread AI exposure beyond the chipmakers is to look at the power, cooling, and networking suppliers feeding the data-center buildout (we profiled seven of them in a free report here).
Your Nasdaq 100 Index Fund Owns AMD Too
The Invesco QQQ Trust( NASDAQ:QQQ ) held $20.1 billion of AMD, or 4.10% of net assets, as of June 30, 2026. That works out to roughly 0.54 percentage points of drag from AMD alone. QQQ also held the AI GPU leader at 7.60% and a memory maker at 5.64%, plus more than a dozen other chip and storage names. The Nasdaq 100 Index caps any single issuer at 24% at each quarterly reweighting, but that does nothing to limit total exposure to one sector.
S&P 500 investors have exposure as well. The Vanguard S&P 500 ETF( NYSEARCA:VOO ) spreads its money across 519 holdings. Even so, information technology made up 38.0% of net assets as of June 30, 2026.
Overlap Risk Retirement Savers Often Miss
Many 401(k) and IRA investors own a broad index fund as their core holding and then add a chip ETF for growth. That combination can hold the same companies twice. A portfolio split between QQQ and SMH holds AMD through both funds, along with the same GPU, equipment, and memory stocks. On a day like this one, the chip fund and the core fund fall together. Fund weights also change as prices move between quarterly filings, so the June figures above are a guide to current exposure, not an exact measure. To check your own exposure, add up the weights for each top holding across every fund you own and see how much of your account depends on one theme.
What to Watch as Washington and AMD Deliver Next
Policy headlines from the new Congress will likely keep driving chip ETFs in the near term. AMD's own outlook remains aggressive. Chief executive Lisa Su said, "Based on our current visibility, we now expect revenue to grow more than 80% in 2027." She also warned that "in 2027, we are planning for PC market unit shipments to decline by a double-digit percentage." Fourth-quarter non-GAAP gross margin guidance of about 55% is another number to track.
Keep an eye on the stock, on whether the losses in SMH and SOXX narrow in the afternoon, and on the Nasdaq 100's next quarterly reweighting in December. Any fund holding several chipmakers will keep moving with each new AI regulation headline.
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One investment mistake could create big risks for your retirement. Many investors make the same critical errors: being too conservative, making big bets on "sure things," or paying excessive fees. Any of those blunders can endanger your hard-earned savings.
Now you can learn the mistakes even experienced investors make (and ways you can sidestep them before it's too late) with this new guide: 13 Retirement Mistakes and How to Avoid Them from Fisher Investments. (sponsor)
Contact editorial@247wallst.com for any questions or corrections.
