Nvidia, Micron, and Other AI Stocks Take a Dive After Elections

Nvidia, Micron, and other artificial intelligence stocks dropped in value after the U.S. elections. The market shift let some air out of the growing AI bubble.

After posting gains on Wednesday, the S&P 500 index fell by about 3.9% as of 2:30 p.m. Eastern Time. The index tracks major companies involved in the artificial intelligence buildout, including Nvidia and Oracle.

Individual company shares suffered steep declines. Nvidia shares dropped to trade lower than they were at the start of the year. Memory and storage maker Micron saw its stock fall by about 15%.

Democratic victories in the U.S. midterms and local votes across the country to limit data center expansion drove the drop in investor confidence. Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, told CNBC that investors are now questioning Wall Street's financial forecasts. Wall Street had previously predicted $1.2 trillion in artificial intelligence-related capital spending for next year. "Well, maybe that's not going to happen," Boockvar said.

Summary

The drop in stock prices shows that investors are growing more cautious about the massive financial investments flowing into artificial intelligence. Political shifts and local pushback against data centers have forced Wall Street to rethink how much money companies will actually spend on AI next year.