Overnight, the U.S. stock market experienced a rare panic.

The Nasdaq dropped by 5.52%, the S&P 500 fell by 4.36%, and the Dow Jones decreased by 3.44%, with the seven major tech companies evaporating about $1 trillion in a single day; the Philadelphia Semiconductor Index dropped over 12%, SanDisk fell by 22%, Micron and AMD dropped around 17%, and Nvidia fell by more than 9%.

Why did it drop?

Firstly, the “blue wave” triggered by the midterm elections sparked fears of AI regulation.

The Democratic Party secured both the House and Senate and made breakthroughs in data center construction in states like Texas and Georgia.

The market is concerned that data centers may face stricter environmental regulations, electricity, and land approval processes, or even phased pauses.

UBS estimates that about 30% of new data center capacity planned in the U.S. may be affected.

This directly impacts the chain of “continued expansion of AI computing power – sustained growth in chip orders – continuous increase in capital expenditure by cloud vendors.”

Secondly, the anxiety over AI investment returns has shifted from emotion to pressure on financial reports.

Companies like Google, Amazon, and Meta are under pressure regarding free cash flow, Intel's performance guidance is weak, and the market is starting to ask: after spending hundreds of billions, when will profits catch up?

Thirdly, the valuations of semiconductors and the computing power chain are too high, and there is overcrowding in positions.

This year, the market has been overly optimistic about AI expectations, especially in the AI hardware chain, which had significant early gains and concentrated institutional holdings; once expectations reverse, programmatic stop-losses, deleveraging, and retail selling will compound the decline.

The surge in VIX also indicates that panic sentiment is noticeably rising.

In addition, Federal Reserve officials have released hawkish signals, rising oil prices have heightened inflation concerns, and pressure from the dollar and U.S. Treasury yields is suppressing high-valuation growth stocks.

With such a drop, many are curious whether the bearish outlook for the Democratic Party has already been priced in.

To conclude, it cannot simply be said that it has been priced in.

More accurately, the market has only completed the first layer of pricing: the Democratic Party's victory itself.

However, what truly affects AI valuations are the subsequent policy implementations, which remain uncertain.

It can be understood that Wall Street sees the bad news and takes the best escape route, but if we think calmly, is everyone really clear about the precise calculation of this negative news?

It is likely still unclear, as quantifying these negative factors into profits, cash flow, and valuation models is not easy, or there is not yet specific data available.

Therefore, in the short term, the pricing of policy uncertainty is insufficient.

Only after the Democratic Party truly controls both chambers and discussions about AI regulation, data center approvals, power grid access costs, taxes, and antitrust investigations are revisited might there be an answer.

Nvidia's earnings report on the 17th of this month, or insights from management, are worth paying attention to.

The market previously priced in “loose regulation + rapid expansion,” and now needs to reassess the pace of capital expenditure and the return cycle.

Qualitatively, AI has not been stifled, but the pace of expansion may slow.

Both parties do not wish for the U.S. to lose its AI advantage, but the Democratic Party emphasizes compliance, energy consumption, antitrust issues, and public interest more.

This means that AI will still develop, but instead of having a green light all the way, it will shift to certain intersections where it may have to wait for traffic lights.

From the supply chain perspective, the degree of impact varies.

Cloud giants that already possess a large amount of operational computing power are relatively better buffered, and may even increase the value of their existing assets due to limited supply.

There is also a reverse logic.

Some institutions believe that tech companies might rush to boost capital expenditures before the policies are fully implemented; if future expansion of computing power is restricted, existing computing assets will become even scarcer.

However, this can only hedge part of the risks and cannot negate the valuation discount brought about by tightened regulations.

Overall, the impact from this midterm election was indeed somewhat unexpected but also revealed some issues, such as previous high expectations and high valuations.

However, I believe this is not necessarily a bad thing; after all, it had been too frantic, and it’s time to hit the brakes. The most crucial point is that the development trend of the AI industry is clear; changing leaders in both chambers will not alter that.

For investments, it is indeed a situation where knives are flying down; if it is unclear when the knives have stopped falling, it is better to avoid them first and wait until things become clearer.

On the news front, focus on the statements of Democratic officials and the viewpoints of AI companies;

On the fundamental side, pay special attention to companies’ earnings reports, particularly Nvidia's report on the 17th and Micron's report next month.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到[email protected]，本平台相关工作人员将会进行核查。