The Nasdaq Composite plunged 5.52 percent Thursday to 24,315.00 points, its steepest drop in roughly a year and a half, List of News reported.
The selloff followed Democratic victories in Tuesday’s elections to both chambers of Congress and a series of governorships, which investors read as a signal of stricter artificial-intelligence regulation and tighter oversight of data-center construction, Novinky reported. AI chipmakers led the decline: Nvidia fell more than 9 percent Thursday, and Advanced Micro Devices dropped more than 17 percent.
Shares of AI technology suppliers fell again last week even as their earnings estimates stand higher than three months ago, Economic newspaper reported. The paper searched S&P 500 companies for the sharpest gap over the past three months between falling prices and rising profit expectations.
Chipmakers Lead the Decline
Japan’s Nikkei 225 fell 5.96 percent to close at 57,434.77 points, according to Seznam Zprávy, while China’s CSI 300 shed 1.64 percent to 4,045 points. In South Korea, SK Hynix dropped 13.4 percent and Samsung Electronics lost 6.35 percent.
In the United States, the so-called Magnificent Seven — the seven most valuable American tech companies — lost a trillion dollars in market value in a single day, CzechCrunch reported.
Nvidia lost more than $400 billion in market capitalization over several days, the outlet said, while AMD and Micron each fell more than 17 percent, Intel dropped 10.3 percent and memory-card maker SanDisk lost more than 22 percent. In Europe, Germany’s Infineon fell 8.5 percent and the Dutch chip-equipment maker ASML dropped 6.5 percent.
| Stock or index | Move | Source |
|---|---|---|
| Nasdaq Composite | −5.52% to 24,315.00 | List of News |
| Nikkei 225 | −5.96% to 57,434.77 | List of News |
| AMD / Micron | −17%+ each | News, CzechCrunch |
| SK Hynix | −13.4% | List of News |
Democratic Wins Spark Regulation Fears
Donald Trump blamed voters for the slide. “The stock market recorded a decline today because Democrats had a successful Tuesday. It’s so sad, but you can blame yourselves,” he wrote in a post, according to Novinky.
“Investors apparently realize that some newly elected members of Congress and governors want to slow AI infrastructure development,” said Melissa Brown, an analyst at SimCorp, in comments carried by Novinky. Seznam Zprávy reported that American voters had shown strong opposition to data-center construction, adding pressure on chipmakers.
CzechCrunch noted that enthusiasm for AI had been fading for weeks, with investors doubting that massive AI spending would pay off and several tech companies reporting disappointing quarterly results. The Nasdaq 100 had already entered correction territory on Monday, before the elections.
Prices Fall While Estimates Rise
The central puzzle remains the divergence Hospodářské noviny identified: AI suppliers’ shares have repeatedly cheapened over the past three months while analysts’ profit forecasts for them have risen. Either the market sees a problem analysts have missed, or the selloff is opening buying opportunities, the paper wrote.
E15.cz noted that Wall Street stood about 16 percent higher after Thursday’s drop than it did when the first American bomb fell on Iran at the end of February.
Bubble Warnings Grow Louder
The Bank of England said last year that valuations of US stocks resembled, in some metrics, levels seen near the peak of the dotcom bubble, according to Seznam Zprávy. Between 1995 and the Nasdaq’s March 2000 peak, the index rose about 600 percent; by October 2002 it had fallen 78 percent and erased all those gains.
Ed Zitron, a critic of generative AI and author of the blog Where’s Your Ed At, compared the current AI boom to the 2008 mortgage bubble, Seznam Zprávy reported. He noted that 80 percent of the revenue of both OpenAI and Anthropic comes from just 1 percent of customers.
Seznam Zprávy also reported that so-called circular financing supports demand for Nvidia's chips, suggesting the company's infrastructure funding may create demand for its own products. Nvidia firmly denies creating false demand.
Musk Loses Hundreds of Billions
The world’s richest person donated $470 million to Republican campaigns, including $224 million in Texas alone, but most of the candidates he backed lost, including Ken Paxton and Greg Abbott in Texas, where his key companies are based, CzechCrunch reported. SpaceX shares fell 9 percent Thursday and Tesla dropped 11 percent, wiping out roughly $450 billion across the two firms.
Musk’s fortune now stands at about $790 billion, down from more than $900 billion at the start of November, CzechCrunch said. The rout also hit Anthropic, creator of the Claude AI assistant, just as the company prepares for a stock-market debut.
Questions Behind the Selloff
Democratic victories in Congress and governorships raised fears of stricter AI regulation and oversight of data-center construction, Novinky and Seznam Zprávy reported.
The Nasdaq Composite fell 5.52 percent, its largest drop in about 18 months, and the Magnificent Seven lost $1 trillion in a single day, according to Seznam Zprávy and CzechCrunch.
Yes — Hospodářské noviny found that earnings estimates for AI technology suppliers are higher than three months ago even as their share prices have fallen.
The unresolved question is the one Hospodářské noviny posed: whether investors are pricing in a risk that analysts have not yet spotted, or whether the widening gap between falling prices and rising estimates marks a buying opportunity.
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