AI stock slide after midterms: What it means for your 401(k)

AI stocks plunged Thursday in their worst day on Wall Street in over a year, following Democrats' sweeping midterm victories that gave them control of Congress, with Nvidia down 8 percent and AMD down 16 percent. Investors fear increased federal oversight of the AI data-center industry could slow construction by up to 30 percent by 2028, and voters rejected or restricted data centers in 35 of 41 ballot measures. Since AI companies now comprise half of S&P 500 businesses, most 401(k)s are affected, though younger workers with higher stock allocations face greater risk than older investors holding more bonds. Financial advisors urge patience, noting market volatility typically evens out over time, and Morningstar still rates 11 top AI firms as undervalued, with its AI index up 20.2 percent this year despite the downturn.