US election win hits AI and data center stocks hard

Democratic victory in US midterm elections has triggered a major selloff in AI and data center stocks, with investors fearing stricter regulations and permitting hurdles for new projects. Shares of data center operators Corvive and Nebius fell 11% and 15% respectively, while the Philadelphia Semiconductor Index dropped 8% to a six-month low. Nvidia, Broadcom, GE Vernova, and Constellation Energy also declined, with Amazon and Alphabet falling 3.3% and 1.5%. Democratic governors elected in Texas, Georgia, and Ohio campaigned on freezing data center permits and tightening construction rules. Analysts warn up to 30% of planned US data center capacity by 2028 could face delays. OpenAI is dropping non-disclosure agreements for new sites, and Microsoft reportedly cancelled a $10 billion contract with Nscale.