Chipmakers fell sharply on Thursday. Nvidia The Nasdaq had its worst day in 19 months after this week’s midterm election results, raising concerns on Wall Street that the build-up of artificial intelligence is slowing. like neocloud core weave It fell for two consecutive days.
Qualcomm The announcement of unexpected earnings forecasts for the current quarter contributed to the sell-off. Qualcomm and Nvidia both fell more than 9%, with the latter losing about $450 billion in market capitalization. The Nasdaq fell 5.5%, its steepest decline since April 2025.
The environment for companies closely tied to AI infrastructure is getting worse, with rising interest rates, expanding funding needs and a Democratic Party sweep in Congress raising concerns that large swaths of the market will be weighed down by too much debt and too little revenue.
“It’s going to continue in terms of technology development, but if there’s a slowdown in actual development, buildings, infrastructure, etc., that’s going to be a trade-off in stock prices,” Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, said in an interview on CNBC’s “Squawk on the Street.”
advanced micro device, micron and applied materials All companies posted double-digit loss rates on Thursday. Elon Musk, who donated hundreds of millions of dollars to elect Republicans in states such as Texas, saw the stock of his publicly traded company. space x and teslaeach decreases by more than 9%.
In Tuesday’s election, the states with the most ambitious AI data center plans all turned blue. Democrats won key gubernatorial and U.S. Senate races in Texas and Ohio, as well as the gubernatorial race in Georgia, where Democratic Sen. Jon Ossoff was up for re-election.
According to Ballotpedia, 41 local ballot measures in 10 states were on the ballot Tuesday that would limit data center construction in various ways. Voters opposed data centers on each measure except one in Harwood, North Dakota, according to a Ballotpedia analysis and additional results collected by CNBC on Wednesday.
Wednesday night at the Wall Street Journal Tech Conference. meta President Dina Powell McCormick told the audience after the election that building data centers “is going to be more difficult.” The newspaper added that one of the winning governors said, “Let’s meet right after the inauguration, because we don’t want to lose investment in our town. We don’t want these jobs to go elsewhere.”
Meta, like its hyperscaler peers — alphabet, Amazon and microsoft — laid out an ambitious path to infrastructure development, with a spending plan of well over $100 billion a year. Meta had negative free cash flow in its latest quarter, joining Alphabet and Amazon, both of which had negative free cash flow in the previous quarter. Hyperscalers each fell between 2% and 4% on Thursday.
Qualcomm stock price chart.
Qualcomm on Wednesday became the latest chipmaker to report rapid growth in its data center business, although it’s still a relatively small division for the company. Qualcomm’s data center revenue for the quarter was $650 million, mostly from customization and connectivity work, CEO Cristiano Amon said.
“It’s not a demand issue. It’s a supply issue,” Amon said in an interview with CNBC. “If we had more supply, we probably could have done better.”
Qualcomm and other chip makers’ problems intel And AMD claims that the global memory shortage is driving up prices and making key supplies difficult to obtain, leading to higher prices for consumer devices.
Intel announced last week that its data center revenue rose 78%, but its stock price plummeted after the company’s data center revenue fell short of expectations due to memory shortages. And AMD announced this week that revenue in its data center business more than doubled in the recent period.
Investors are looking past the numbers and questioning the sustainability of that growth and whether technology buyers will be able to take advantage of it all.
“There’s going to be an inevitable reaction and that could lead to some delays and that would be a concern,” Richard Claude, a portfolio manager at Janus Henderson, told Squawk on the Street. “Unfortunately, we’re not going to solve it in terms of knowing the answer right away.”
— CNBC’s MacKenzie Sigalos contributed to this report.
Watch: CNBC, Janus Henderson’s full interview with Richard Claude
