NEW YORK, Nov 7 – Investors have wiped approximately US$2.5 trillion from the Nasdaq 100’s market value as growing concerns over artificial intelligence (AI) investment and data centre expansion triggered a major stock market sell-off.
The Nasdaq Composite plunged 5.5%, marking its steepest single-day decline since the market turmoil caused by US tariffs in April 2025.
The sharp drop followed a strong victory by the Democratic Party in the US midterm elections. Investors fear the political shift could bring tougher scrutiny of AI projects and slow the construction of data centres across the country.
AI Stocks Face Heavy Selling Pressure
Technology and semiconductor companies suffered some of the biggest losses during Thursday’s trading session.
The Nasdaq 100, which tracks 100 of the largest non-financial companies listed on the Nasdaq exchange, fell 6.4%. The decline erased around US$2.5 trillion in market value.
Meanwhile, the Philadelphia Semiconductor Index dropped 12%, reaching its lowest level in more than six months.
Major chipmakers also faced heavy losses. Nvidia shares fell 9%, while Advanced Micro Devices (AMD) plunged 17%.
The market downturn also affected major technology companies. Amazon and Alphabet each lost 2.2%, while Microsoft shares declined 3.6%.
In addition, Wall Street’s VIX index, which measures expected stock market volatility, recorded its biggest increase since December 2024.
Investors Worry About AI Spending and Data Centres
The latest sell-off reflects growing doubts about whether companies can generate enough returns from their massive AI investments.
Technology firms have committed billions of dollars to build data centres, develop AI infrastructure and expand computing capacity.
However, investors are becoming more cautious about the costs and financing risks involved.
Some analysts also expect stronger opposition to new data centres from local communities. These facilities require large amounts of electricity and water, which could place additional pressure on local resources.
According to UBS analysts, around 30% of planned US data centre capacity additions in 2028 could face risks from construction delays or pauses.
The political uncertainty following the midterm elections has added another challenge for companies planning major AI infrastructure projects.
AI Infrastructure Companies Suffer Major Losses
Companies linked to AI computing and data centre operations also recorded steep share price declines.
CoreWeave, a cloud computing provider focused on AI workloads, fell 10%. Meanwhile, Nebius dropped 15%.
Both companies have faced growing investor concerns about their borrowing levels and the huge costs of expanding AI infrastructure.
Data centre operators Applied Digital, Cipher Digital and IREN also suffered losses of more than 14% each.
The pressure extended beyond technology companies. Energy and equipment suppliers that support data centre construction also experienced declines.
Investment experts say the market is beginning to look beyond AI’s future potential and focus more closely on the financial costs of developing the technology.
Nasdaq Enters Correction Territory
The Nasdaq Composite has now fallen nearly 12% from its record closing level on October 6.
A market correction occurs when an index falls at least 10% from a recent peak.
The latest decline has raised concerns about further selling, particularly as investors reassess the value of companies linked to the AI boom.
However, some market participants believe the sell-off could eventually create opportunities for investors once prices stabilise.
For now, the market remains sensitive to political developments, AI investment returns and the future pace of data centre construction.
The latest downturn highlights a growing challenge for the technology sector: companies must now convince investors that their massive AI investments can deliver sustainable financial returns.
Source : AWANI | Rewritten By Minutesmy
