Tech stocks face biggest decline in a year amid AI fears
The Nasdaq 100 index faces market-value losses exceeding $2 trillion as investors worry about AI infrastructure expansion.
Big tech stocks slumped on Thursday, according to Mint, putting them on track for their largest decline since last year's Liberation Day rout. The Nasdaq 100 index is facing market-value losses of more than $2 trillion due to investor fears that the Democratic Party's midterm victory could slow AI infrastructure growth.
Semiconductor and neocloud companies saw significant drops as concerns grew regarding potential delays in multi-billion dollar data center projects. The Philadelphia SE Semiconductor index fell as much as 11.2 per cent, while Nvidia dropped 9 per cent and Advanced Micro slumped 15 per cent.
Hyperscalers also declined, with Amazon.com falling 2.5 per cent and Alphabet sliding 2 per cent. Microsoft shares dropped 2 per cent, and Bloomberg News reported the company is increasing oversight of certain data center projects from Nebius, IREN, and Nscale.
Analysts at UBS estimated that roughly 30 per cent of the US data center capacity expected to be added by 2028 might face risks from possible construction halts. Bruce Zaro, managing director at Granite Wealth Management, said there will be pushback regarding data centers straining power grids and water systems.
Smaller infrastructure firms also faced heavy selling. CoreWeave slumped 12 per cent, while Nebius dropped 15 per cent. Data-center operators Applied Digital, Cipher Digital, and IREN each tumbled more than 14 per cent.