Post-Midterm AI Capex Fears Spark Broad Tech Sell-Off With Nvidia Losing $450 Billion in Market Cap

A Democratic sweep of Congress in the November 2026 US midterm elections triggered a sharp sell-off in AI infrastructure stocks, as investors grew concerned that new legislation or permitting requirements could slow data center construction and curtail AI capital spending over the next two years. Nvidia and Qualcomm each dropped more than 9% in a single session, with Nvidia losing nearly $450 billion in market cap, pushing the Nasdaq down 5.5% for its worst day since April 2025. The Dow fell 1,800 points as the sell-off broadened beyond chipmakers, with AMD, Micron, and Applied Materials all suffering double-digit percentage declines.

The Nasdaq 100 staged a partial bounce as oil prices fell, but analysts warn that recovery is fragile. Investors are pulling back, in the words of one chief investment officer, until they get a clearer sense of the midterms' implications for the AI capex cycle, which has been the dominant economic tailwind for roughly three years.

Not all observers share the bearish view. Vertiv Holdings, which reported record Q3 results with 61% revenue growth and strong margin expansion driven by AI data center demand, now trades below its historical forward valuation averages after the sell-off, a setup some analysts call a buying opportunity. SiTime similarly beat Q3 guidance and raised its Q4 outlook, with gross margins rising to 70.7%, yet its shares are down 34% since September. SoftBank's Q2 FY2026 results showed AI-related losses offset by record financing activity, adding another layer of complexity to the sector picture. Bulls argue the structural demand for AI infrastructure remains intact and that the market is mispricing near-term political risk against long-term earnings growth.