Some of the Year’s Hottest AI ETFs Just Had a Terrible Day

Key Takeaways

• The Nasdaq 100 closed about 15% lower from its most recent closing high in October, plunging into correction territory.

• ETFs with big holdings in once-hot chip stocks took major hits on Thursday, while data center and AI infrastructure stocks 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), Micron Technology (MU) andSeagate Technology (STX) among the biggest decliners in the S&P 500.

And AI infrastructure and data center stocks including Vertiv (VRT), Quanta Services (PWR) notched declines in the double digits, closing lower for a second consecutive day. The Nasdaq 100, which closed 5% lower, is off roughly 15% 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 slid more than 10% today while the latter is close to wiping out its 2026 gains.

Roundhill’s Neocloud ETF (NCLD), which launched in August, is 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, declined almost 40% 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.

Still, some of the votes have fueled investor concern. Democrat state representative Gina Hinojosa’s defeat of Greg Abbott for the governor’s office in Texas is an example, though Clode also said the move could be a “knee-jerk reaction.”

“We do see heightened uncertainty around the AI data center buildout,” Morningstar Senior Equity Analyst Malik Ahmed Khan said in written comments. “That said, I believe the medium-to-long term outlook for AI data centers in the U.S. will likely include developers providing more safety safeguards, local investments, and contractual commitments to initiatives such as investing in local communities and protecting consumers from rising electricity bills.”

“If there is a productive business case for building them, then they will get built,” Northlight Asset Management CEO Chris Zaccarelli said. “The all-or-nothing mentality is surprising to us because we believe the real truth is more nuanced.

This article has been updated since it was first published to reflect the close of trading.

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