Nasdaq plunges into correction territory as midterm results raise fresh questions about AI boom
AI chip and data-center stocks led the selloff as investors questioned whether heavy spending will produce quick returns.
- On Thursday, the Nasdaq Composite officially entered correction territory, falling more than 10% below its October 6 record high as investors retreated from AI-linked infrastructure stocks following Democratic midterm election victories.
- Democratic midterm wins prompted fears of stricter data center regulation; UBS analysts estimate that 30% of expected 2028 capacity additions now face potential construction pauses, threatening the AI buildout.
- Nvidia and AMD led the rout, with Nvidia falling 8.7% as the Nasdaq-100 shed over $2.2 trillion in market value, reflecting the intensity of the retreat from chip and data center stocks.
- Hedge funds cut leverage and reduced teams as volatility soared; Goldman Sachs reported that funds are "selling back pockets of the market" they had recently bought, compounding losses.
- JPMorgan analysts expect the AI boom to persist but become costlier and slower in coming years, marking the steepest decline since April 2025's "Liberation Day" tariff sell-off as growth assumptions recalibrate.
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Enid News & EagleGlobal shares skid after AI worries send Wall Street tumbling
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The stock exchanges have experienced the worst day since Trump's "Liberation Day" one and a half years ago on Thursday. Did the markets only understand yesterday that the expansion of AI data centers is expensive?
The Democratic victory in the mid-term elections in the US threatens to harden the conditions of the sector. Ibex 35 fell by 1.16% in the opening, up to 19,256 points
The sales wave from the USA has captured the technology exchanges in Asia. Concerns about the future regulation of AI put investors under pressure - how strongly does it hit the chip values?
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