A dramatic collapse in chip and technology stocks has triggered a wave of selling that has spilled over from the USA to the stock exchanges in Asia and Frankfurt. Trade in South Korea had to be temporarily suspended because the turbulence was so severe. The main reason behind this is the concern that the political course in the USA could now change after the surprising victory of the Democrats in both chambers of Parliament.
“It’s the hangover after the election party,” says financial expert Lisa Hassenzahl from Her Family Office to the ARD finance editorial team. After the relief that there was more clarity in the political situation after the midterms, concerns are now arising that technology companies and data centers could be more strictly regulated in the future.
The Democrats are more skeptical about the chances of artificial intelligence (AI) than the Republicans, who have traditionally advocated the dismantling of government regulations.
Resistance to new data centers
Already during the election campaign there was resistance to building more data centers for the AI boom. But Republican politicians also imposed construction freezes. The main criticism is the enormous electricity consumption of the systems, which could further increase energy prices for the population.
There are also concerns about noise, air pollution and water shortages. There are also fears that data centers create few permanent jobs. Higher taxes on the profits of AI companies in the USA are also being discussed.
Even though the political climate in the USA has changed as a result of the midterms, financial expert Hassenzahl points out: "It remains to be seen whether Donald Trump will ultimately prevail in his role as president."
Previous AI beneficiaries from Germany are suffering
The concerns had already become apparent on Thursday in the shares of large tech and chip companies on Wall Street, which lost billions in market value within a few hours. “Exactly what investors have been fearing for months has happened on Wall Street: that the cluster risk from a few tech heavyweights will take revenge and drag the major indices down if they fall more sharply,” says market analyst Jochen Stanzl from Consorsbank.
German stocks that had previously benefited from the AI boom also came under pressure. The Infineon share temporarily lost more than eight percent on Thursday. Siemens Energy and the construction group Hochtief, whose prices had been boosted by the AI euphoria and the construction of data centers, also recorded losses. The stocks were able to partially recover on Friday morning.
Investors are apparently increasingly asking themselves whether the enormous expenditure on artificial intelligence and the expansion of infrastructure will really be worthwhile given the changed political environment.
The fall in prices is still clearly noticeable in the DAX today. The German leading index was trading at around 25,700 points in the early afternoon, which means a loss of almost 2.4 percent. Just the day before, the DAX had reached a new record high of around 26,693 points - then it crashed by almost 1,000 points.
Anthropic IPO under pressure
These concerns could also diminish another great hope for AI: The skepticism also affects Anthropic. According to information from insiders, potential investors have doubts about the schedule for the AI company's planned IPO.
An advertising tour with financiers for the IPO was actually supposed to start next week - this could now be on the brink in view of the latest developments, four people familiar with the events told the Reuters news agency.
Investors are therefore pushing for a lower valuation than the recently discussed $1.5 trillion. To get commitments, Anthropic may have to offer a larger discount.
Anthropic's quarterly losses in focus
Investors cite the company's ongoing quarterly losses and its high financial commitments to expand AI as reasons. The company declined to comment. Investors are also waiting for the sales figures for October, which Anthropic initially left open in the updated prospectus.
Additional headwinds come from successful initiatives to restrict data centers in several US states. A delay in the expected $100 billion issuance could increase worries about the entire AI industry and weigh on the broader stock market. Some time ago, investors had expected an IPO in October and a valuation of up to two trillion US dollars.
Time pressure affects AI boom
Concern that the AI bubble could burst has been growing on the stock markets for more than a year, and yet prices have continued to rise. The shares of the so-called “Magnificent Seven” - the seven big tech companies - which include Apple, Microsoft, Nvidia and Alphabet, have enormous weight on the world markets. The rise of such technology stocks has long been considered an important driver of stock market upswings in times of war and crisis.
Private investors affected
Many private investors are also feeling the recent decline in prices because large tech companies such as Apple, Nvidia and Microsoft now make up a large share of global ETFs - in some cases 20 to 25 percent. According to consumer advocates and asset managers, anyone who has been saving widely over many years should remain calm at the moment, as fluctuations of ten to 20 percent are normal.
However, anyone who has invested primarily in AI or semiconductor ETFs could experience greater fluctuations. In general, the consumer advice center advises that when investing, you should always keep an eye on how much risk you can take personally and what your own pain threshold is.
Crisis or correction?
However, one question inevitably arises with these developments: Is this really the beginning of a bubble bursting or simply a correction? Financial expert Lisa Hassenzahl is important to say: "Keep calm."
You don't see a bubble bursting yet. “But yes, it is a correction and it shows that even with technology stocks, not everything always goes strictly upwards,” says Hassenzahl.
However, the coming months are likely to remain volatile in this area of the stock markets. Because doubts remain as to how quickly the enormous investments in hardware and data centers will pay off.
