AI stocks lost more than 2 trillion dollars of value on Thursday, November 5, 2026, pushing the Nasdaq into a correction, meaning a drop of more than 10% from its peak. Investors sold because the midterm results raised fears that new lawmakers and local voters will slow the construction of AI data centers, the giant buildings full of chips that AI companies need to grow.
How big was the drop?
By Thursday afternoon, according to InvestmentNews:
- Nasdaq Composite: down about 5.4%, more than 10% below its October 6 record
- S&P 500: down about 4%, on track for its worst day since the April 2025 tariff rout
- Dow Jones: down about 1,711 points (3.2%), wiping out Wednesday’s 1,500-point rally
- Philadelphia Semiconductor index: down nearly 10%
- Nvidia and Broadcom about 9% lower, Oracle about 8%, cloud providers CoreWeave, Nebius and Iren 13% to 17%
Why did the midterms scare AI investors?
Data centers were on the ballot. Candidates who opposed new data centers won races in Texas, Ohio and South Carolina, and dozens of local measures in 13 states blocked or restricted new projects, NPR reported. Voters worry about water, electricity bills and jobs, a backlash we covered in Hermantown and Victoria and in the ballot measure fight. Investors also expect more scrutiny of AI from the incoming Congress, AP reported.
Why do data centers matter so much to stock prices?
Think of data centers as the factories of AI. Chipmakers like Nvidia sell into them, cloud companies rent them out, and AI labs need them to train new models. Computing power is already scarce, so if building slows, the sales and profits investors have priced in arrive later or not at all. That is why chip and cloud stocks fell hardest, while companies with other businesses, such as Alphabet and Amazon, fell far less.
Was it only about the election?
No. Investors had been nervous for weeks about whether huge AI spending will pay off, about AI-related debt, and about circular deals where chipmakers invest in AI labs that then buy their chips. The election gave that nervousness a trigger. Our explainer on why AI stocks swing so hard covers the pattern.
Did stocks recover?
Partly. AI shares bounced on Friday, November 6, and Nvidia, which lost about 450 billion dollars of value on Thursday, regained about 4%. Analysts were split: some called Thursday “a true panic,” others said the market had become too dependent on AI and a reset could be healthy.
What should investors watch next?
Two things. First, what newly elected officials actually do about data center permits, since campaign promises and laws are different. Second, Anthropic’s IPO, expected later in November, which will be a live test of how much investors still want to pay for AI growth. This article is for information only and is not investment advice.
