As $2.5tn wiped off Nasdaq, Nvidia and other tech stocks suffer steep losses

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The Nasdaq 100 index erased $2.5 trillion in market value in a single day as Nvidia and other major technology companies suffered steep losses amid growing fears over the future of artificial intelligence (AI) infrastructure spending in the US.

According to a Reuters report, the tech-heavy Nasdaq Composite plunged 5.5% on November 5, marking its biggest one-day drop since the market sell-off triggered by US President Donald Trump’s “Liberation Day” tariffs in April 2025. The sharp decline came after Democrats scored major victories in the US midterm elections, raising concerns that increased political scrutiny and opposition to data centre construction could slow the expansion of AI infrastructure.

Nvidia, AMD and semiconductor stocks suffer major losses

Nvidia shares dropped 9% during Thursday’s trading session, while Advanced Micro Devices (AMD) plunged 17%. The Philadelphia Semiconductor Index, which tracks major chipmakers, fell 12% and touched its lowest level in more than six months.Several companies directly exposed to AI data centre construction also recorded steep losses. CoreWeave shares fell 10%, while Nebius dropped 15%. Both companies have faced investor concerns over their reliance on borrowing and large-scale infrastructure investments.

Data centre operators Applied Digital, Cipher Digital and IREN each tumbled more than 14%. The weakness also extended to companies supplying power and equipment for the AI infrastructure boom. GE Vernova shares fell 7.4%, while Constellation Energy declined 2.5%. Microsoft shares dropped 3.6%, while Amazon and Alphabet each fell 2.2%.

Why are investors worried about AI data centres

As stated in the Reuters report, the Democrats’ strong performance in the US midterm elections has raised concerns that local opposition and tighter scrutiny could slow the construction of new data centres.

Several incoming Democratic governors, including in Texas, have called for an immediate moratorium on data centre development.Data centres require large amounts of electricity and water, raising concerns among communities about pressure on power grids and local resources. UBS analysts estimated that around 30% of expected US data centre capacity additions in 2028 could be at risk from potential construction pauses.The latest market downturn also comes as investors question whether the enormous spending on AI infrastructure will deliver adequate returns. Analysts have warned that the AI boom may be entering a phase where companies are judged not just on their growth potential but also on the cost of building and operating their infrastructure. “The market’s moving from the promise of AI to the price of AI,” said Ted Parkhill, founder and CEO of Incline Investment Management as quoted by the news agency.