US Midterm Results Rattle AI Stocks; $2.5 Trillion Wiped Off Tech Market: Why Investors Fear
Nvidia, AMD and other major technology companies suffer heavy losses as investors worry that political pressure and restrictions on data centres could slow the growth of artificial intelligence
Major technology companies around the world saw their stock prices drop sharply on Thursday after the US midterm election results raised new worries about the future of artificial intelligence (AI). Investors started selling shares in some of the largest tech firms because they were concerned that new political decisions might slow AI progress and impact future investments.
According to Dow Jones data, the Nasdaq Composite, which tracks many of the world's biggest technology companies, fell more than 5.5%. The decline wiped out an estimated $2.5 trillion from the market's total value. Other major US stock indexes were also hit, making it one of the worst trading days since 2025. The impact quickly reached international markets, as tech companies in Japan, South Korea, and Taiwan also reported significant losses.
Democrats Aims to Regulate AI Growth
A major reason for the market drop is rising concern about the future of AI development in the United States. During the election campaigns, several Democratic candidates promised to set stricter limits on building data centres and the fast growth of AI. Data centres are big buildings full of powerful computers that help companies run online services, store data, and operate AI tools like ChatGPT.
But these facilities use a lot of electricity and water. As more are built, local communities have become worried about higher electricity bills, environmental harm, and strain on public resources. In the November 3 US Midterm Elections, Democrats emerged in both the US Senate and House of Representatives. Now, investors worry the party might bring in stricter rules that could make it harder for tech companies to build new data centres.
Nvidia, AMD and Other Chipmakers Face Major Losses
Companies that make computer chips for AI systems saw some of the biggest losses. Nvidia, one of the world's most valuable tech companies, saw its shares drop by over 9%. This fall wiped out more than $400 billion from its market value in just one trading session. Other big companies were also hit.
Shares of AMD and Micron fell by over 17%, while Intel dropped about 10.3%. SanDisk, known for memory and storage products, saw its shares fall by more than 22%. The Philadelphia Semiconductor Index, which tracks 30 major chipmakers, also dropped by more than 12%.
These losses show how much chipmakers depend on AI growth. If companies slow down building new data centres, they might also cut back on orders for the chips and equipment needed to run them.
Investors Question Whether AI Spending Will Pay Off
The recent market drop has also raised an important question: Are tech companies spending too much on artificial intelligence?
In recent years, companies like Microsoft, Google, Amazon, and Meta have invested heavily in AI. They have spent billions building new facilities, buying computer equipment, and creating AI-powered products. These investments have helped the industry grow, but now investors are wondering how long it will take for companies to earn back what they have spent.
Susannah Streeter, chief investment strategist at Wealth Club, told BBC News the situation is becoming a bigger worry for investors over the AI trade has hit Wall Street hard," she said. Streeter added that worries about whether AI investments will pay off are now combined with the chance that new data centre construction could slow down.
Because of this, investors are now more careful about buying shares in companies that rely a lot on AI-related business.
