AI trade falls as Democratic sweep and data center moratorium call hit tech hard

Last week in 4 points

1. 

   Democrats win midterms, tech takes the hit

   Markets jumped Wednesday when Democrats swept the midterms, with the Dow rising over 1,200 points. That gain reversed sharply Thursday when Democrats called for a national data center moratorium, sending the Nasdaq into correction territory and wiping roughly $2 trillion in tech market value by week's end.

   S&P 500 (SPY)

   −2.7%
2. 

   Nvidia falls near six-month low, board probes CEO

   Nvidia dropped over 9% on Thursday alone as the data center moratorium call hit AI chip demand fears. Over the weekend, Nvidia's board launched a formal investigation into CEO Jensen Huang after reports of a relationship with an alleged Chinese spy. Huang admitted to an affair.

   NVDA

   −8.8%
3. 

   Chip stocks lead the week's biggest declines

   Lumentum fell 35.9%, Seagate dropped 28.5%, Marvell lost 28.1%, Western Digital fell 28.0%, and SanDisk dropped 27.4%. AMD fell nearly 13% on Thursday despite a strong earnings beat and a $17 billion revenue outlook, while Intel dropped 9.1% on a softer server demand outlook.

   Chip stocks (SMH)

   −11.2%
4. 

   Microsoft ends Oracle AI cloud deal

   Microsoft said it is winding down its deal to rent AI cloud computing capacity from Oracle, signaling a push to own infrastructure directly. Oracle fell about 4% on the news, adding to losses the company had already taken after announcing plans to borrow another $10 billion for AI spending.

   MSFT

   +1.7%

Communication Services +4.9%

Real Estate +1.9%

Consumer Discretionary +1.9%

Financials +1.2%

Consumer Staples +0.7%

Health Care 0.0%

Utilities −0.7%

Materials −1.5%

Industrials −2.8%

Technology −8.2%

Energy −12.0%

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