AI selloff tests investment boom; analysts see de-risking, not fundamental reset
QQQ•Analysts said the pullback in AI stocks reflected investors trimming positions rather than abandoning the long-term investment story. About $2.5 trillion was wiped from the Nasdaq 100’s market value after midterm election results raised concerns that opposition to data centers could delay projects and increase costs.
1. Investors reassess AI risks
Analysts at Jefferies, UBS and Rabobank said the AI stock selloff reflected de-risking rather than a fundamental reset, while warning that political and regulatory hurdles could make data-center construction slower and more expensive. Concerns about permitting, power availability and construction timelines add to worries about investment returns and complex financing.
2. Investment cycle seen intact
Jefferies economist Mohit Kumar said the midterms would not derail the AI trade, noting that AI investment had become an important driver of US growth and job creation. Rabobank’s Elwin de Groot said the investment cycle remained intact, although data-center expansion could become slower, costlier and more geographically fragmented. The Philadelphia Semiconductor Index is down about 40% from its July 23 record high.
