Credit: Photographer: Michael Nagle/Bloomberg via Getty Images
Key Takeaways
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The Nasdaq 100 is down more than 10% since its most recent closing high in October, plunging into correction territory.
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ETFs with top holdings in once-hot chip stocks are taking major hits on Thursday, while data center and AI infrastructure stocks have extended their declines.
The Blue Wave is throwing some cold water on the AI trade.
Today, a day after a post-election rally that followed a change of control in Congress, several once-hot corners of the tech sector are flagging—and buzzy AI ETFs that hold big helpings of AI-powered stocks are logging outsize declines—as investors try to determine the next phase of the tech trade.
For now, they aren’t upbeat about it. Popular chip stocks took major hits, with SanDisk (SNDK), Western Digital (WDC), Advanced Micro Devices (AMD), Seagate Technology (STX) and Micron Technology (MU) among the biggest decliners in the S&P 500.
And AI infrastructure and data center stocks including Vertiv (VRT), Quanta Services (PWR) were down in the double digits, poised to notch losses for a second consecutive day. The Nasdaq 100 was recently off more than 10% from its most recent closing high in October, technically indicating correction territory.
The Roundhill Memory ETF (DRAM), which invests in memory stocks, was down about 15% on Thursday, veering closer to the price at which it started trading earlier this year than it has since the spring. Among longer-tenured ETFs including the iShares Semiconductor (SOXX) and WisdomTree AI and Innovation Fund (WTAI), the former is down about 10% today while the latter is close to wiping out its 2026 gains.
Roundhill’s Neocloud ETF (NCLD), which launched in August, is now below where it started. And some leveraged long ETFs, which seek to multiply the daily moves of certain stocks or indexes, are getting hit too. The Direxion Daily Semiconductor Bull 3X ETF (SOXL), which aims to triple the NYSE Semiconductor Index’s daily return, has declined more than 30% today.
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Some investors are tracing today’s move to the election results, positing the possibility of pushback against AI spending that might curtail growth. Tuesday’s votes, however, may have simply fanned sentiment seen in investor reaction to some big tech earnings from the third quarter. Richard Clode, a tech portfolio manager at Janus Henderson, likened the across-the-AI-board selloff to a “buyer’s strike,” in an interview with CNBC this morning.
“There’s a lot of pressure and there’s a lot of forced selling,” he said, explaining that a good chunk of long-short funds were down before the results were in.
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