Tech Stocks Suffer Biggest Selloff Since COVID as AI Investment Fears Intensify

Technology stocks suffered a major selloff, with losses spreading across semiconductor manufacturers, data center operators, software companies and gig-economy businesses as investors worried that the US midterm election results could slow the artificial intelligence boom, Alexei Oreskovic reported for Fortune Tech.

Technology and semiconductor stocks plunged as investors reassessed the outlook for artificial intelligence investment and data center expansion following the US midterm elections.

The tech-heavy Nasdaq Composite fell more than 1,340 points, or 5.2 percent, in midday trading, wiping out more than $3 trillion in market value, according to Bloomberg data cited by Fortune.

The decline marked its steepest drop since the market turmoil following the US administration’s Liberation Day tariff announcement in April 2025.

The Philadelphia Semiconductor Sector index, which tracks major chip companies, also plunged.

It was down more than 1,000 points during trading and was on track for its biggest daily loss since March 2020.

Major technology stocks also came under pressure. Meta Platforms fell 3.4 percent, Microsoft declined 2.8 percent, and Nvidia dropped 8 percent during the reported trading session.

Thursday’s selloff reversed the previous day’s rally, when US stocks rose following Democratic victories that gave the party control of both chambers of Congress.

Voters also backed candidates and ballot measures opposing or seeking restrictions on new AI data center construction.

The election results have raised concerns that new regulations, permitting restrictions and local opposition could slow the expansion of data centers needed to support AI services.

Meta President Dina Powell McCormick acknowledged the challenges at an industry conference on Wednesday, saying that building data centers in the United States would become harder.

She also said major cloud computing companies were considering whether to build more facilities outside the country, given the enormous investments involved and the need to manage risks.