Tech stocks tumbled on Wall Street Thursday on concerns over the future of AI data centre projects following the US midterm elections, wiping out gains from a post-election rally the day before.
A recovery in oil prices also dampened sentiment in equities trading. The tech-heavy Nasdaq Composite fell more than five percent in late morning trading in New York before paring losses, with chipmakers bearing the brunt of the sell-off. The three companies supply the processors and memory that power AI data centres, and the massive buildout of those facilities by tech giants has been a key driver of their revenue growth in recent years.
Industry giant Nvidia fell more than six percent, while its competitor AMD dropped 12 percent and memory chip maker Micron lost 11 percent.
Data centres have faced broad opposition from US voters regardless of political affiliation, and many midterm winners have pledged to put the brakes on such projects, for example by imposing moratoriums on new buildouts. He noted that AI stocks had driven the rally this year and that markets hate uncertainty. The Philadelphia Semiconductor Index, which includes the global heavyweights in the AI-related industry, fell more than eight percent. (This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
“Tech stocks have gone into freefall, as investors focus on what the new guys in Congress will do to a sector so favoured by the current president and his coterie,” said Chris Beauchamp, chief market analyst at online trading and investing platform IG. “If this goes south, this market action turns from rotation to general panic,” Beauchamp said.
