This article first appeared on GuruFocus.
Nvidia (NASDAQ:NVDA) shares dropped more than 9% on Thursday, wiping nearly $450 billion from its market value as investors reassessed the outlook for AI infrastructure spending amid fresh regulatory concerns.
The selloff extended beyond chipmakers, with the Nasdaq Composite falling 5.52% and entering correction territory. The decline followed the U.S. midterm elections, which shifted control of both chambers of Congress and raised questions about future policies affecting data center development.
Texas has become a particular focus for investors because of its role in the planned expansion of U.S. computing infrastructure. Newly elected state officials have raised the possibility of restricting data center projects, citing electricity demand, water consumption and environmental concerns.
UBS estimates that 30% to 40% of planned U.S. data center capacity additions through 2028 could face construction delays. Texas represents about 27% of the country’s expected data center capacity, adding to uncertainty around the pace of AI infrastructure investment.
The pressure also reflects changing investor expectations for the sector, as concerns grow that tighter oversight and longer project timelines could weigh on returns across the AI supply chain.