Tech companies gain over $750 billion
Tech giants, including Google-parent Alphabet, Apple, Amazon, Microsoft and others, bounced back, putting five of the world’s largest companies on track to add more than $750 billion in combined market value. The rally comes on the heels of a crushing tech sell-off that shaved nearly $1 trillion off the tech-heavy Nasdaq in a single week, and essentially, erasing roughly $2 trillion over the past month. However, as the picture around the US midterm results became clearer, shares across the technology sector surged as trading opened on November 4, according to a report by news agency Reuters. Amazon jumped 7.4% to hit a three-month high, recovering from summer profit misses and spending disclosures that previously dragged the stock down 1.8%.
Investors had aggressively dumped Big Tech shares after recent quarterly earnings reports revealed that the fierce race to build AI infrastructure was turning once cash-rich, debt-light powerhouses into heavy spenders increasingly reliant on borrowing.
The trigger behind the turnaround is the sweeping Democratic victory in the US midterm elections that is said to slow down the pace of artificial intelligence (AI) data-center construction.
Apple gained nearly 7% to reach an all-time record high. Alphabet, Meta and Microsoft – all three advanced between 2% and 6.3%. Microsoft stood out during earnings season with $18.6 billion in cash flow, while Alphabet had previously suffered its worst single-day drop on record, plunging over 12% and shedding $500 billion after burning massive amounts of cash on AI. Shares of smaller operators, including Applied Digital and Iren, plunged between 6% and 13%.
it had recently felt the squeeze of AI-driven memory chip price hikes While Apple has largely sidestepped the massive capital expenditure race of its peers. The rebound was fueled by landslide Democratic wins across the country, particularly in Texas, where resistance to data-center expansion has rapidly gained momentum. Local opposition to the massive, power-hungry, water-intensive and noisy facilities that underpin the AI boom has reached a boiling point. With Democrats taking key seats, investors anticipate that regulatory roadblocks and community pushback will force companies to decelerate their infrastructure rollout. Data center developers and specialised infrastructure providers suffered heavy losses. Smaller competitors like CoreWeave and Nebius, which have spent multiples of their total revenue to satisfy surging order backlogs, face heightened risks if debt-financed construction projects run into legislative or permitting gridlock, the report noted. You use AI every day. Now get your AI Quotient. Take the AIQ test.