Episode summary
Tech Stocks Plunge as Traders Dump Everything With AI Exposure | Bloomberg Intelligence
Bloomberg Intelligence
· · 23 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Matthew Bloxham, Justin Teresi, Nathan Dean, Ryan Gallagher
Summary
Technology stocks sold off sharply as traders reassessed what a Democratic sweep and a tougher state-level political backdrop could mean for AI, semiconductors, and data-center buildouts. The host and the analyst said the immediate trade was a slowdown in U.S. data-center construction, which hurts semiconductor suppliers but may ease pressure on hyperscalers and neoclouds by reducing the risk of stranded assets and oversized capital spending.
The analyst said the U.S. is not necessarily losing the AI race, arguing that tighter capacity could push frontier-model developers toward more efficient use of compute and power. Qualcomm’s weak outlook fit the same theme: the analyst said higher memory costs, a sluggish smartphone market, and softer expectations for data-center growth are squeezing margins. Memory shortages were expected to last well into 2027, with supply still tight through at least the second half of next year.
On policy, the analyst and the guest said President Donald Trump is likely to lean harder on executive power if Congress is divided, while Democrats’ control of Congress should keep defense spending closer to status quo and increase scrutiny through hearings. Another guest said state moratoriums and permitting fights could slow data-center projects in Texas and New Mexico, though the industry still has a window to rush permits before January.
Key takeaways
- The analyst said a slower U.S. data-center buildout would hit semiconductor suppliers first, while making hyperscalers look less exposed to stranded-asset risk.
- Qualcomm’s weak forecast was linked to rising memory costs and a slower smartphone market, with data-center growth expectations also getting trimmed.
- The analyst expects memory-chip shortages to last well into 2027, with supply still tight through at least 2H27.
- The guest said state-level resistance to data centers could force project-by-project workarounds, especially in Texas and New Mexico.
- The policy analyst said divided government increases the odds that President Donald Trump leans on executive orders and federal leverage.
- The guest said defense spending should stay near status quo, with more congressional oversight but not a major budget reset.
Notable quotes
“the pace of data center buildout in the US is going to slow quite significantly”
“I think it's going to last well into 2027. I think you certainly the the last couple of weeks”
“we're telling our clients that when it comes to defense spending, it's generally going to be around status quo”
“it's going to be extremely difficult for these data center operators. It's not going to change overall data center spending in our view”
“the technologies moved faster than the law. So the the um it's basically a giant loophole”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts or watch us live on YouTube. We are holding right around session lows right now for the major US stock indexes. is the NASDAQ composite down 4.4%.
Investors kind of reassessing what the uh change in the political landscape means for the semiconductor industry, for the AI industry. Let's bring in Matt Bloxom. He's our senior media and tech analyst based in London.
And we're going to talk about Qualcomm's earnings as well. But I do want to get um your take, Matt, on how investors are trying to sus out what the change in power in Washington means for the AI industry and therefore for semiconductors. Uh the Philadelphia semiconductor index is tanking today and as we were looking earlier, the best performing stock in there is down about now 5.2%.
Uh and the worst performing stock, yeah, is Astera Labs down 16%. This is on a daily basis. this is just today.
Um what are what are you seeing Matt? Yeah, I mean obviously the the kind of the big takeaway initially is that um the pace of data center buildout in the US is going to slow quite significantly uh as a result the midterm uh election result and that's going to primarily affect um the the builders and suppliers of components into those uh data centers and particularly um the semiconductor names which is I think you know why you're seeing such focus there but and on the flip side and maybe it seems a little bit counterintuitive but you know the the the consumers of that capacity particularly the hyperscalers and the neoclouds um benefiting because I think we got into this position where investors felt that the investments they were making were slightly disconnected from the reality of you know business economics and they weren't necessarily going to make a good return on those investments.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tech stock selloff
- ai data center policy risk
- qualcomm earnings forecast
- midterm election impact on corporate policy risk
- mobile device tracking by law enforcement
Companies and tickers mentioned
- QCOM
- MSFT
- META
- ORCL
- INTC
- BAC
- C
- WMT
- Qualcomm
- Microsoft
- Meta
- CoreWeave
- Oracle
- OpenAI
- Intel
- Bank of America
- Citigroup
- Walmart
- Penlink
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Intelligence
-
Instant Reaction: Nvidia CEO Jensen Huang Ousted by Nvidia Board | Bloomberg Intelligence -
Nvidia’s Huang Ousted by Board in Move That Roils AI Economy | Bloomberg Intelligence -
CoreWeave Shares Soar After AI Computing Firm Eases Debt Fears | Bloomberg Intelligence -
Anthropic Targets $1.4 Trillion Valuation in Blockbuster IPO | Bloomberg Intelligence -
Nvidia Probe Into CEO Affair Raises Thorny Questions for AI | Bloomberg Intelligence -
Election 'Blue Wave' & Your Wallet; Navigating AI-Driven Market Volatility | Bloomberg Intelligence
Bloomberg Intelligence, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
