A new round of panic selling broke out in U.S. AI technology stocks!

When U.S. stocks closed on November 5, the Nasdaq Composite Index plummeted 5.52%, the Philadelphia Semiconductor Index plummeted 12.2%, Nvidia fell 9.3%, and Advanced Micro Devices (AMD) plummeted 17.3%, making the AI ​​topic the sector with the heaviest selling pressure on Wall Street.

According to the latest analysis from Reuters, this sell-off is not just a valuation correction for technology stocks, but also related to restrictions on data center construction after the U.S. midterm elections, doubts about the return on AI capital expenditures, and rising corporate financing costs. The market is beginning to worry that the huge infrastructure investment supporting the AI ​​boom may not go as smoothly as imagined.

The US election has become a flashpoint! Data center expansion may be put on hold by local government

One of the most direct catalysts for the sharp decline in AI stocks this time was the results of the U.S. midterm election on November 3.

Not only did the Democratic Party gain a majority in both houses of Congress, but in important data center markets such as Texas, Georgia, and Ohio, candidates who advocated strengthening regulation or suspending the construction of some data centers also won victories. These policy propositions cover electricity prices, water resources, land use, environmental impacts and approval requirements for large data centers.

According to an analysis by Goldman Sachs quoted by Reuters, states that may face new policy restrictions account for about 45% of the planned data center capacity in the United States, of which Texas accounts for about 25%. This does not mean that 45% of data centers have been cancelled, but that related projects may face higher regulatory uncertainty.

What the market is really worried about is that if the construction of new data centers is delayed, technology companies may also be forced to adjust their procurement schedules for AI chips, servers, power equipment and network infrastructure.

AI demand isn’t going away, but returns on capital expenditures are starting to be questioned

An important support for the sharp rise in AI stocks over the past few years is the market's belief that large technology companies will continue to increase investment in artificial intelligence infrastructure. Microsoft, Meta, Alphabet and other companies are actively expanding data centers and purchasing GPU, memory and network equipment, driving demand for Huida, AMD and related supply chains.

However, investors are now beginning to ask more realistic questions: How long will it take for companies to invest a lot of money in building AI computing power to translate into sufficient revenue, profits and free cash flow?

Data centers not only require chips, but also involve land, electricity, cooling systems and long-term operating costs. If AI service revenue growth is not as expected, or construction is hindered by policies, companies may face pressure to lengthen the investment payback period. Reuters pointed out that the recent financial reports of some large technology companies have not completely eliminated the market’s doubts about AI capital expenditures and return on investment.

This means that the demand for the AI ​​industry may still continue to grow, but investors are no longer willing to give technology stocks too high valuations based solely on future demand expectations.

Qualcomm and Arm's financial reports fell short of expectations, and semiconductor stocks were fully repriced

In addition to political and capital expenditure concerns, the latest semiconductor company earnings also weakened market confidence. Qualcomm's recently announced results and outlook show that demand for some mobile phone chips fell short of market expectations; Arm's latest financial report also failed to meet investors' expectations for its rapid growth.

Although mobile phone chips and AI data center chips belong to different markets, with technology stock valuations generally on the high side, any signs of slowing growth may prompt investors to reassess the price of the overall semiconductor industry.

On November 5, Huida's stock price fell about 9.3%, AMD plunged 17.3%, and companies related to memory, servers, and data center equipment also generally suffered a sell-off. The Philadelphia Semiconductor Index fell 12.2% that day, showing that the market correction has spread from individual companies to the entire chip supply chain.

However, this does not mean that all AI chip orders have been canceled or that the revenue of the entire semiconductor industry has begun to decline. The sharp drop in stock prices reflects the market's repricing of future growth and risks.

AI data centers are becoming more and more expensive, creating new pressures on financing and cash flow

Another background to this decline is that the construction of AI data centers increasingly relies on huge capital investment.

In addition to large technology companies investing on their own, some data center developers and infrastructure providers also raise construction funds through bond issuance, stock capital increases and other financing methods. When borrowing costs are high, stock prices fall, or construction progress is delayed, companies may face both increased financing costs and delayed future revenue. This pressure is particularly evident for companies that require ongoing capital investment and do not yet generate stable free cash flow.

The market is beginning to differentiate between two types of companies: one type has been able to convert AI needs into revenue and cash flow; the other type is still highly dependent on future capital expenditures, capacity expansion and continued financing. This also explains why the current sell-off is not limited to GPU manufacturers, but also extends to data center development, server, memory, power and related infrastructure companies.

As U.S. technology stocks plummeted, the cryptocurrency market was also affected.Bitcoin (BTC)It fell nearly 6% in the past 24 hours, hitting a low of about $75,114, almost giving up the previous day's gains. $80,000 increase。 CoinGlass A rolling 24-hour statistics in the early morning of November 6th showed that more than $1 billion in leveraged positions in the cryptocurrency derivatives market had been compromised.Forced liquidation, mainly focused on bulls.

When the volatility of technology stocks expands and institutional investors reduce risk exposure, highly volatile assets such as Bitcoin may also be reduced simultaneously. In addition, the forced liquidation of leveraged positions may further amplify short-term selling pressure in the crypto market.

Has the AI ​​bubble burst? The key is whether data center investment can be converted into profits

This plunge in technology stocks does show that investors are beginning to re-evaluate the valuation and growth assumptions of the AI ​​​​theme, but it is not enough to directly declare that the artificial intelligence industry bubble has burst.

What is most worth watching in the future is whether U.S. states will formally promote data center development restrictions, whether large technology companies will adjust their capital expenditure plans, and whether AI chip and cloud service revenue can continue to grow. On the other hand, the company's free cash flow, financing costs and utilization rate of the new data center will also have more reference value than simply announcing the investment amount.

The core of this wave of AI stock crashes is not that the market suddenly believes that artificial intelligence has lost value, but that investors are beginning to worry about whether huge AI investments can be implemented at the original speed and generate sufficient profits.

When data center policy restrictions, disappointing earnings reports, and deleveraging selling pressure occur at the same time, the growth expectations that originally supported the high valuation of technology stocks are challenged. For crypto assets such as Bitcoin, this also means that even if ETF funds return for a time, changes in global risk appetite may still dominate market trends in a short period of time.

〈AI stocks suffered a bloodbath! U.S. election impacts data center, trillion dollar investment returns questionable〉This article was first published inBlock Guest》.