The collapse in technology stocks
Shares of SpaceX, Elon Musk's company, recorded a sharp decline, while technology and artificial intelligence stocks more broadly suffered heavy losses the day after the Democrats' midterm victory, according to BBC Technology. The losses dragged down the Nasdaq Composite, the technology-heavy index, which had lost more than 5% in morning trading. SpaceX shares were down more than 7% in early Friday trading, while Tesla shares lost more than 9%.
The market move was triggered, the BBC writes, by the prospect of stricter controls on data center construction and the artificial intelligence sector after Democratic gains in key data center states, including Texas. This is a reaction to possible regulatory scenarios, not decisions already adopted: the material does not indicate any concrete measures approved.
The local consent issue
The Texas vote is central to the BBC's account: governor-elect Gina Hinojosa ran a campaign strongly opposed to data centers, pledging to pursue a moratorium on new construction in the sector. Texas was won by the Democrats in Tuesday's elections, while Musk had spent nearly $450 million to support Republican campaigns, including at least $45 million in favor of Ken Paxton for the Texas Senate seat.
Some industry executives admitted they were caught off guard by the backlash against data centers. Greg Brockman, president and co-founder of OpenAI, said the reaction surprised him and that more work is needed to secure community support. Speaking at the WSJ Tech conference in Napa, California, he explained that building infrastructure in Texas, Georgia and other places from San Francisco cannot be reduced to a social media message: 'You have to be in those communities.' Dina Powell McCormick, president of Meta, agreed that the industry must improve its communication about the benefits of artificial intelligence: 'We need to double and triple our efforts in telling the story.'
Semiconductors under pressure and bubble fears
The losses also involved chipmakers: AMD lost nearly 17% over the past five days, Micron more than 20%, Intel more than 18%, Nvidia more than 10%, and the Philadelphia Semiconductor Index fell more than 13%. These are changes over multiple sessions, not just the day after the vote, and the material does not specify whether they are all attributable to the elections.
Beyond the immediate impact of the vote, according to the BBC some investors fear that artificial intelligence-related stocks are in a bubble that could be corrected. The article does not quantify this concern or indicate analysts or estimates in support. It therefore remains to be verified whether the decline is a lasting repricing linked to the new political landscape or a temporary correction: the material does not allow this to be established.
