On Thursday 5 November 2026, US time, the Nasdaq Composite fell 5.5%, its worst day since April 2025. AI chip and data centre stocks led the fall. Reports linked it to the US midterm election results, which raised fears that Washington and some states will slow the AI data centre boom. On Friday the ASX 200 fell only 0.5%, and Australia's biggest listed data centre company, NEXTDC, actually closed up 3.6%. From where I sit in Brisbane, Wall Street's AI panic only partly reached the ASX. Here's what happened and why.
How bad was the Nasdaq sell-off?
It was the deepest one-day fall in about 19 months. The Nasdaq Composite closed down 5.5% at about 24,315, more than 10% below its 6 October record, which puts it in "correction" territory. The S&P 500 fell 4.4%, and the Nasdaq-100 fell about 6.4%.
| Stock or index (Thu 5 Nov, US) | Move | What it does |
|---|---|---|
| Nasdaq Composite | -5.5% | Tech-heavy US index |
| S&P 500 | -4.4% | 500 biggest US companies |
| Nvidia | about -9% | AI chips; lost almost US$450 billion in value |
| AMD | about -17% | AI and PC chips |
| Micron | about -17.5% | Memory chips |
| Qualcomm | more than -9% | Phone chips; gave a weak forecast the same day |
| CoreWeave | about -10% | Rents out AI computing power |
| Alphabet, Amazon, Microsoft, Meta | -2% to -4% | The big spenders on AI data centres |
The pattern is worth noticing. The companies that sell to the AI build-out (chips, memory, rented computing power) fell two to four times harder than the giant companies that buy it. The market was betting on less spending, not on AI disappearing.
Why did AI stocks fall after the US midterms?
Investors feared that the election results will make it harder and slower to build AI data centres. Democrats won ground in Congress and in some key data centre states. According to CNBC and ABC News:
- Voters went against data centres in 40 of 41 local ballot measures, citing power bills, water and land use.
- Texas governor-elect Gina Hinojosa has pledged a temporary pause on new data centre approvals.
- Senator Bernie Sanders has called for a national data centre moratorium.
- Qualcomm's weak forecast, worries about rising interest rates and the huge debt behind some AI build-outs added to the selling.
I've seen this story shared online as if a new law to slow down AI had already passed. That's not right. These are election promises and proposals. No national "AI slowdown" law exists, and the new Congress hasn't even sat yet. Some strategists, such as Jefferies, called the sell-off "reactionary, not a fundamental reset". The market was pricing in risk, not a done deal.
Did ASX data centre stocks fall too?
Only partly. On Friday 6 November the ASX 200 fell 0.5% to about 9,020. The technology sector fell 1.4%, and materials fell 3%. But the biggest data centre name went the other way.
NEXTDC closed up 3.6% on Friday, after jumping about 51% on Thursday. Goodman Group and US data centre giant Digital Realty bought up to 9.9% of the company at A$9.50 a share, about 45% above Wednesday's close. NEXTDC's board called the move "opportunistic". The buyers said they have no current plan for a takeover bid, but kept the right to make one.
The board's word makes sense in context. NEXTDC shares had lost more than 40% this year. Most of the fall came in late October, after the company disclosed a power supply delay at its M3 Melbourne data centre and revised its 2027 guidance. So yes, Australian data centre shares have been falling. That just wasn't the story on Friday. While New York was selling AI infrastructure, two of the world's biggest property and data centre investors were buying a slice of Australia's.
What does this mean for the AI boom?
My view, as an IT worker in Brisbane and not a financial adviser: the demand for AI hasn't changed this week. The question is who pays for the power, the land and the debt. The tools I use every day, like the coding agents and AI models I test in my AI Models & Agents series, still need these data centres. If building them in the US gets slower and dearer, prices for AI services could rise, and countries with land, power and stable rules, Australia included, could win more of the build-out. That's also why I keep testing small models on my own 8GB graphics card. Running AI locally doesn't depend on anyone's data centre.
The flip side is that Australia faces the same local questions about power bills and water. If the US mood spreads, Australian projects will get harder too. I'll keep an eye on it.
What do you think? Was Thursday a sensible correction of an AI bubble, or an overreaction to the election? Tell me in the comments.
Sources
- CNBC, AI meltdown: Nvidia and Qualcomm drop more than 9%, pushing Nasdaq to worst day since April 2025, 5 November 2026.
- CNBC, NextDC shares surge 51% on Goodman, Digital Realty stake purchases, 5 November 2026 (board response).
- ABC News, ASX falls sharply as US tech stocks plunge on predictions of AI pullback, 6 November 2026 (ASX close, sectors, ballot measures).
- Index closing levels and individual stock moves from market reports on 5–6 November 2026. Exact figures vary slightly between sources.
Checked 6 November 2026. This is general information and my personal view, not financial advice. The research used AI-assisted search, checked against the sources above. The images were made locally with Qwen Image 2.1, and AI helped me edit the English.
