Tech stocks faced a sharp sell-off on Wall Street Thursday as investors grew concerned about the future of AI data centre investments following the US midterm elections. The decline erased gains from the previous day’s post-election rally.
The Nasdaq Composite dropped more than 5% during late-morning trading before recovering some ground. Semiconductor companies suffered the biggest losses. Nvidia shares fell over 6%, AMD plunged 12%, and Micron Technology declined 11%.
The sell-off reflects growing uncertainty around AI infrastructure spending. These companies supply the advanced chips and memory components used in AI data centres, a major source of revenue growth in recent years.
However, opposition to new data centre projects is increasing across the US. Several newly elected lawmakers have indicated support for restrictions, including temporary bans on new developments.
According to IG market analyst Chris Beauchamp, investors are concerned about how the new Congress could affect the technology sector. He warned that uncertainty surrounding AI investments could turn a market correction into broader panic.
Meanwhile, the Philadelphia Semiconductor Index dropped more than 8%, highlighting the pressure across the global chip industry.
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