SpaceX shares plunge as tech and AI stocks fall
Tech stocks and the Nasdaq Composite index dropped following Democratic victories in the US midterm elections.
Shares in Elon Musk's SpaceX fell by more than 9 per cent by lunchtime during Thursday trading, according to BBC News. The decline occurred as technology and artificial intelligence (AI) stocks plummeted a day after Democrats won the US midterm elections.
The Nasdaq Composite stock index fell by more than 5 per cent at one point in early trading. The S&P 500 index also dropped by 3.8 per cent by lunchtime. Market reactions follow possible tougher scrutiny of the AI industry and data centre construction after Democratic wins in states such as Texas.
In Texas, governor-elect Gina Hinojosa campaigned against data centres and pledged a moratorium on new construction in the sector. Musk had spent nearly $450m backing Republican campaigns, including at least $45m for Ken Paxton's Texas senate seat, but Texas turned blue on Tuesday night.
Chipmaker shares also saw significant losses. AMD dropped more than 14 per cent, Micron fell by as much as 17 per cent before a slight recovery, Intel fell by more than 7 per cent, and Nvidia dropped nearly 9 per cent. The Philadelphia Semiconductor Index fell by 10 per cent.
Susannah Streeter, chief investment strategist at Wealth Club, said the sell-off on the Nasdaq and S&P 500 was sending shockwaves into other markets. She stated that fresh panic over the AI trade has hit Wall Street hard due to fears regarding AI infrastructure returns and a potential slowdown in data centre construction.
OpenAI president and co-founder Greg Brockman said at a conference in Napa, California, that the reaction to data centres surprised everyone. Meta president Dina Powell McCormick also noted that the industry needs to improve communication regarding the benefits of AI.