Investors wipe US$2.5 trillion off Nasdaq as blue tsunami prompts AI fears

Tech-heavy Nasdaq suffered its deepest single-day drop since April 2025, losing over US$2.5 trillion in market value amid concerns over rising artificial intelligence scrutiny, especially concerning data center construction. The decline was triggered by Democrats' strong performance in US midterm elections, which may hinder AI infrastructure expansion and impact smaller firms struggling to raise funds due to higher interest rates and tighter financial conditions.

This marked the second consecutive day of selling in AI stocks and the fifth decline of over 500 points in the Nasdaq Composite since mid-October, as the AI momentum began to falter. The rally's momentum has cooled, with the Nasdaq Composite having shed nearly 12 percent from its October 6 record. Analysts and portfolio managers cautioned that the scale of the sell-off could prompt further market declines, particularly in Asia.

Shares of hyperscalers like Amazon and Alphabet also dropped, while the broader Nasdaq 100 index fell 6.4 percent, erasing US$2.5 trillion in market value. The industry's growth hinges on a swift data center buildout, but there is growing concern over potential delays imposed by local opposition, strained power grids, and water system strain.