By Islam El-Sakka
U.S. stocks plunged Thursday, sending the S&P 500 down 3% toward its worst session since President Donald Trump's 2025 tariff announcements, as a Democratic sweep in the midterm elections triggered a broad selloff in artificial intelligence and data-center shares.
AI and Data Center Stocks Lead Decline
The Nasdaq Composite slid 3.6% and the Philadelphia SE Semiconductor Index tumbled 8% to a six-month low. Neocloud operators CoreWeave and Nebius fell 11% and 15% respectively, while semiconductor giants Nvidia and Broadcom posted heavy losses. Data-center operators Applied Digital, Cipher Digital, and IREN each dropped more than 15%.
Political Uncertainty Fuels Investor Anxiety
Investors fear Democratic control of Congress will bring heightened regulatory scrutiny to the data-center industry, potentially slowing infrastructure buildouts. UBS analysts estimated that roughly 30% of expected U.S. data-center capacity additions for 2028 could be endangered by construction pauses.
Analyst Perspective
"The market's moving from the promise of AI to the price of AI," said Ted Parkhill, founder and CEO of Incline Investment Management. "There's no question that AI is going to be transformative for the world in the long run. But that doesn't mean every AI-related stock is currently priced appropriately. There's going to be a lot of turmoil."
Broader Market Impact
The selloff extended to utility providers and equipment suppliers, with GE Vernova down 7% and Constellation Energy off 4.3%. Big Tech hyperscalers also declined, as Amazon fell 3.3% and Alphabet lost 1.5%. Separately, Qualcomm plunged 9% after quarterly smartphone-chip sales missed Wall Street estimates.
