AI buildout stocks slump after US midterms

AI and data center-linked stocks fell on November 5, 2026, as a sweeping US midterm victory for Democrats raised concerns about new hurdles to the sector’s rapid expansion. The Nasdaq 100 index was set to lose about $1.8 trillion in stock market value, with declines concentrated in semiconductor, neocloud and data-center names that had driven much of the market’s earlier gains.

Investors focused on the risk that data-center buildouts worth billions of dollars could face delays under a Democratic-controlled Congress. Around 30% of expected US data-center capacity additions in 2028 could be at risk from potential construction pauses, underscoring the sensitivity of the AI infrastructure trade to policy and permitting uncertainty.

Neocloud stocks, which have become a barometer of anxiety over the heavy spending required for AI, came under renewed pressure. CoreWeave (CRWV) shares fell 11.4%, while Nebius (NBIS) dropped 15.2%. Cipher Digital was among the hardest hit, falling 21%, and IREN and Applied Digital (APLD) also lost ground.

The weakness extended to companies supplying power and equipment to the data-center boom. GE Vernova (GEV) fell 1.5%, while Constellation Energy slipped 1%.

Large US hyperscalers showed a different trading pattern. Amazon.com and Alphabet were up 1.9% and 1.6%, respectively. Some investors viewed a slower pace of data-center construction as a potential positive for these companies by curbing capital expenditures and increasing the value of existing facilities.

Analysts noted that the market has begun to shift its focus from the promise of AI to the price of building and operating the necessary infrastructure. Comments from investment managers highlighted expectations of greater volatility, with an emphasis on margins and financing conditions as key differentiators among AI-linked firms.

The Democratic sweep, including wins in key data-center hubs such as Texas and Georgia, also drove broader rotations across sectors. Clean-energy stocks rallied as investors anticipated stronger federal support and increased scrutiny of efforts to roll back emissions rules, while fossil-fuel-friendly policies faced a more challenging path.

Defense contractors came under pressure as markets reassessed expectations for a proposed $1.5 trillion budget under a Democratic-controlled Congress. Northrop Grumman fell 3.7%, and RTX (RTX), Lockheed Martin (LMT) and L3Harris (LHX) lost between 3% and 6%, amid concerns that spending could grow more slowly than previously anticipated. The moves underscored how shifting political dynamics are reshaping expectations across AI infrastructure, utilities, renewables and defense.