Tech stocks suffered their sharpest sell-off since the Covid-era market turmoil on Thursday, wiping more than 3 trillion dollars (£2.3 trillion) from US share values as investors feared the country’s midterm election results would slow the artificial intelligence data-centre boom.
The tech-heavy Nasdaq fell more than 1,340 points, or 5.2 per cent, in midday trading. The decline represented its biggest daily fall since the “Liberation Day” tariff announcement in April 2025.
Chipmakers were among the worst affected. The Philadelphia Semiconductor Sector index, which tracks 30 major companies, dropped more than 1,000 points and was on course for its largest one-day fall since March 2020.
Nvidia shares fell 8 per cent, while Micron and AMD each lost roughly 14 per cent. Meta, the parent company of Facebook, declined 3.4 per cent and Microsoft was down 2.8 per cent.
The sell-off marked a sharp reversal from Wednesday, when shares rallied after Democrats retook the Senate and House of Representatives in the midterm elections. Voters also overwhelmingly backed candidates and ballot measures seeking to restrict the construction of AI data centres in the US.
Concerns over the implications for the industry became clearer after Meta president Dina Powell McCormick said on Wednesday that building data centres in America would become “harder”.
“I can also tell you that every hyperscaler is now thinking about ‘Do we need to build outside the United States?’ Because they’re enormous investments, hedging those investments is a wise thing to do,” she said at a Wall Street Journal conference.
Dan Ives, an analyst at Yorkville Ives who has generally taken a bullish view of the sector, said he now expected technology companies’ capital spending growth to peak next year, rather than in 2028 or 2029.
Alphabet, Microsoft, Amazon, Meta and Oracle, along with newer “neocloud” companies, have spent hundreds of billions of dollars on chips, computers, networking equipment, land, energy and construction as they race to build facilities for AI services.
Ives said spending by Big Tech and hyperscalers could still exceed 1 trillion dollars in 2027, but predicted that growth would “moderate significantly” by 2028 as the data-centre build-out slowed, particularly amid political opposition in Texas.
He estimated that at least 10 per cent of the planned 800 to 1,000 AI-focused data centres in the US could be removed from development plans, while as many as 20 per cent could face significantly longer regulatory processes.
Companies that have borrowed heavily to build data centres in competition with Amazon and Google were also hit hard. CoreWeave, one of the leading neocloud firms, fell 9 per cent and was on course for an 18 per cent decline over two days.
Google, whose cloud operation is supported by its search advertising business, was down 1.6 per cent.
