US AI stocks plunge sharply; blocked data center approvals become a market concern
On November 5, the Nasdaq 100 fell 6.36% and the Philadelphia Semiconductor Index fell 12.25%, with Nvidia down 9.26% and AMD down 17.26%. The article argues that, beyond valuation and earnings pressure, local governments pausing approval of new data centers and concerns over power and water resources are forcing a reassessment of growth expectations for chip and computing power leasing companies. Trump, meanwhile, attributed the stock market decline to the election results.
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The article links the sharp sell-off in US AI stocks with local pauses on data center approvals, offering an observational clue for understanding the obstruction of computing power expansion.
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On November 5, the Nasdaq 100 plunged 6.36%, the S&P 500 fell 4.36%, and the Philadelphia Semiconductor Index plummeted a staggering 12.25%. Among them, Nvidia dropped 9.26%, AMD plunged 17.26%, and even companies that supply power to data centers were not spared.
Trump subsequently posted:
The stock market crashed today because the "stupid Democrats" won big on Tuesday (November 3). So sad, and you have only yourselves to blame!
Interestingly, on the first trading day after the election results were announced, the U.S. stock market actually rose quite well; it was only data center-related stocks that had already begun to come under pressure. It was not until a day later that the market turned fully.
So what exactly is the worry?
After returning to the White House, Trump has basically focused on "deregulation and accelerated construction," revoking Biden-era AI safety executive orders, launching the "America's AI Action Plan," simplifying environmental reviews and construction approvals for data centers, proposing support for large projects through loans, tax incentives, and other means, and also strongly advocating changing artificial intelligence (AI) to:
Superintelligence (SI).
Put simply, he wants American AI companies to get power faster, build computer rooms, and deploy more GPUs. Nvidia sells chips, CoreWeave rents out computing power, and Microsoft, Google, and Meta keep increasing capital expenditure; the entire industrial chain is expanding at this pace.
Suspend approval of new data centers until the state legislature enacts laws protecting local residents.
The reason is not complicated. Data centers require large amounts of electricity and water resources, and companies enjoy tax incentives, while local residents worry about rising electricity bills and water shortages.
Once approvals slow and construction costs rise, the growth expectations of chip and computing power leasing companies will have to be recalculated. Combined with already high valuations, financing costs, and financial report pressure on some chip companies, the declines were naturally amplified.
At the same time, tech giants with large amounts of computing power, such as Microsoft and Google, as well as AI newcomers waiting to go public such as Anthropic, are also a lobbying force that cannot be ignored.
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