Chip stocks extend their decline, Arm and Qualcomm earnings show pressure on phone business

Chip stocks extended their slide on Thursday, with the Philadelphia Semiconductor Index falling 10.1% intraday after election results favored policies restricting new AI data center construction and quarterly reports from Arm and Qualcomm highlighted smartphone weakness. Arm beat second-quarter revenue, profit and guidance estimates but its third-quarter royalty revenue missed expectations on soft smartphone sales, while Qualcomm's fiscal fourth-quarter results and current-quarter outlook came in slightly above consensus even as its smartphone chip sales were hurt by weak demand. Wall Street analysts cut price targets on several AI infrastructure chip names following the election outcome. Among other chipmakers, Astera Labs posted third-quarter results and fourth-quarter guidance above expectations, and Coherent beat fiscal first-quarter estimates and raised its outlook. Investors will watch whether the data center policy stance weighs further on AI-linked semiconductor valuations and whether handset demand recovers in coming quarters.