AI Stocks Slide as Election Results Fuel Data Center Risks
- AI stocks including AMD and Micron fell sharply on Thursday following Citi Research warnings.
- The Nasdaq 100 entered correction territory as markets reacted to a Democratic election victory.
- Data center bans have surged from near zero in 2025 to over 500 by October 2026.
- UBS analysts estimate that 30% of projected 2028 U.S. data center capacity is now at risk.
AI-related stocks, including Advanced Micro Devices and Micron Technology, experienced a significant decline following a warning from Citi Research regarding new data center risks. The Nasdaq 100, tracked by QQQ, dropped due to its heavy exposure to chip and AI firms.
AI and data center-linked stocks fell on Thursday after Tuesday's midterm election results showed a Democratic victory, which raised concerns about potential obstacles to industry expansion. The Nasdaq entered correction territory on Thursday and the Dow Jones Industrial Average declined by more than 1,000 points.
Nasdaq 100 faces massive market value loss
This decline follows fears that the Democratic election win will cause AI delays.
Philadelphia SE Semiconductor index hits six-month low
The Philadelphia SE Semiconductor index fell 10.2% on Thursday, hitting its lowest point in over six months, driven by losses in NVIDIA Corp. and Broadcom Inc.. Shares of CoreWeave Inc. fell 11% on Thursday, while Nebius Group N.V. shares dropped 15%.
On Wednesday, Micron Technology Inc. and Advanced Micro Devices Inc. shares fell 16% at one point, while Nvidia fell 9%, according to Benzinga Pro market data. Market indices saw the following changes: SPY at 737.19, down 3.86%; QQQ at 652.49, down 5.70%; BTC/USD at 75,989.97, down 5.52%; DIA at 517.08, down 3.01%; GLD at 375.96, up 0.93%; and TLT at 82.16, up 0.49%.
Data center bans exceed 500 as regulatory concerns mount
Concerns that a Democratic-controlled Congress might implement stricter regulations on data center development are contributing to the decline in AI-related stocks. U.S. data center bans and pauses were near zero through mid-2025, reached approximately 20 by December 2025, passed 300 in June 2026, and exceeded 500 by October 2026, according to Citi Research data shared by The Information.
Big Tech shares decline following Wednesday market shift
On Wednesday, Amazon.com Inc. and Microsoft Corp. shares rose 6% each, while Alphabet Inc. shares rose 4.6%. Investors made these bets as they anticipated that a slowdown in data center construction could curb spending on artificial intelligence.
By Thursday, the market shifted as Amazon fell 3.9%, Alphabet shed 2.7%, and Meta Platforms Inc. slid 3.4%.
Asian chip stocks and TSM face global impact
Asian chip stocks plunged overnight due to fears regarding potential restrictions on data center development.
Taiwan Semiconductor Manufacturing Co. Ltd. faces an impact from this potential slowdown because it builds the advanced processors used in data centers.
AMD financial and corporate profile
Advanced Micro Devices is a public semiconductor manufacturing company headquartered in Santa Clara, California. Founded in 1969, the company holds 2,501,165 LinkedIn followers. As of September 30, 2024, the company had a market capitalization of $265.56 billion.
The earnings per share for that period reached $2.65.
Investors in the company include Amazon, JP Morgan, Mubadala Investment Company, and Daniel S. Loeb. The most recent funding round occurred on May 1, 2026, when the company secured $5.00 billion in post-IPO debt.
Micron operations context
Micron Technology operates primarily in industrial machinery manufacturing and medical devices. The company does not have a direct link to the artificial intelligence sector.
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