Democratic midterm wins raise the risk of data center buildout restrictions. Investors now question the $1.2 trillion AI capex forecast for next year. Tech stocks fell sharply on Thursday. The Nasdaq Composite dropped 5% and entered correction territory. The iShares Semiconductor ETF fell 11%, its worst day since March 2020. The Global X AI & Tech ETF fell 6% on the day and 15% over the past month. The Dow Jones Industrial Average also fell over 1,600 points. A 4.8% 10-year Treasury yield makes riskier AI stocks less attractive. Some investors see this as a buying opportunity for undervalued tech. Existing AI capacity may gain value as new buildout faces political headwinds. Microsoft Azure’s 48% year-over-year growth suggests demand still outstrips supply. Analysts advise selectivity in AI investments rather than broad exposure.
What changed
AI infrastructure buildout outlook was broadly optimistic with high growth expectations.
What it unlocks
Investors reassess AI trade positioning and consider selective opportunities in tech.
- $1.2T AI capex forecast for next year
- Nasdaq Composite down 5% on Thursday
- iShares Semiconductor ETF down 11%
- Global X AI & Tech ETF down 6% on the day, 15% over the past month
Sources