Few weeks have whipsawed investors like this one. On Wednesday, November 4, 2026, the day after the midterm elections, the Dow surged 1,569 points, or 3%. CNN reported it was the index's best day since April 2025 and its biggest post-midterm gain since 1982. Democrats had seized control of both the Senate and the House. Brent crude fell almost 8.7% to $94.62 after Vice President JD Vance said, "The reason we lost is the war."
The rally faded by Thursday, November 5. Investopedia reported the Nasdaq was down 5% and the Dow had dropped about 1,600 points, erasing Wednesday's gains. The PHLX Semiconductor Index fell about 10% as investors worried that Democratic wins in data-center states like Texas and Georgia could slow AI construction. "If you push out the pace or change the pace of the data center buildout, you begin to change the fundamental trajectory for many of those suppliers," Citi's Scott Chronert told Reuters.
Two companies that reported on Wednesday evening showed how sharply the market split.
AppLovin (NASDAQ: APP)
AppLovin, the mobile and e-commerce advertising platform, posted the kind of quarter few companies can match. Third-quarter revenue rose 55% to $2.18 billion, above FactSet's $2.07 billion estimate. Net income jumped 72% to $1.44 billion, or $4.30 per share, ahead of the $4.03 consensus. That works out to a 66% net margin and an 84% adjusted EBITDA margin. Free cash flow came to $1.42 billion.
CFO Matt Stumpf noted that the largest digital ad platforms grew between roughly 10% and the mid-20s this season. "We grew 55%, several times faster than the market," he said. CEO Adam Foroughi said upgraded AI ad models were only partly rolled out in the quarter. "The transition is still in front of us," he said.
Fourth-quarter guidance calls for revenue of $2.37 billion to $2.40 billion, or 43% to 44% growth, with adjusted EBITDA margins of 84% to 85%. The board also added $3.20 billion to its buyback program, bringing the total authorization to $3.60 billion.
Shares were up 30.89% at $355.69 as of 3:49 p.m. ET, against a prior close of $271.75. That puts AppLovin's market value near $108.75 billion and its P/E at about 23.91. Even after the jump, the stock sits 51.80% below its 52-week high of $738.01 and 57.95% above its low of $225.19. Five of six firms tracked raised their targets on November 5, with RBC and Oppenheimer each at $520.00. The average target of $460.00 implies about 29.33% upside, and the high target implies about 46.19%.
Qualcomm (NASDAQ: QCOM)
Qualcomm's fiscal fourth quarter beat estimates. Revenue was $10.32 billion, against expectations of $10.11 billion, and adjusted EPS of $2.17 edged past the $2.16 consensus. Automotive revenue jumped 89% to $1.99 billion. Data center revenue came in at $650.00 million, and Qualcomm reiterated a fiscal 2027 data center target of $5.00 billion. It also projected non-handset revenue growth of more than 60%.
The problem was phones. Handset chip sales, Qualcomm's largest business, fell 26% to $5.14 billion and missed StreetAccount's $5.21 billion estimate. Rising memory costs, driven by AI data-center demand, are forcing phone makers to raise prices, and that is hurting demand. "We don't have a demand issue; it's a supply issue," CEO Cristiano Amon told analysts. The company expects the handset market to be flat in 2027. Its fiscal first-quarter EPS guidance of $2.15 to $2.35 has a midpoint below the roughly $2.27 to $2.32 analysts expected.
Shares were down 7.64% at $159.95 as of 3:49 p.m. ET, against a prior close of $173.19. They recovered from an intraday drop of about 13.63% around 11:00 a.m. Qualcomm's market value sits near $170.80 billion, and its P/E of about 12.61 is low for a chipmaker. The stock is 38.46% below its 52-week high of $259.92 and 31.12% above its low of $121.99.
Analysts cut targets on November 5. Rosenblatt kept a Buy rating but lowered its target to $205.00 from $235.00, while Barclays kept an Underweight rating and cut to $150.00 from $180.00. The average target of $168.00 implies only about 5.03% upside. The $205.00 high target implies about 28.17%.
Why the Split
AppLovin makes money from AI software and doesn't depend on new data centers being built. Qualcomm faces a double squeeze. AI demand is driving up the memory costs that hurt its phone customers, while its data-center growth story now carries political risk.
What to Watch
The new Congress is seated on January 3, 2027. Schwab strategists flagged next year's debt-ceiling fight as possibly "the biggest potential market-moving issue looming" in the first half of 2027. Investors will also watch whether data-center moratorium proposals gain traction in states such as Texas and Georgia.
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