AI Trade About to Crash? The U.S. Midterm Elections Could Be the Next "Black Swan"

Odaily News: AI concept stocks suffered another sell-off this week, with some of the hardest-hit shares staging a strong intraday rebound on Thursday, and companies like CoreWeave also recovering some lost ground. But as the U.S. midterm elections on November 3 approach, investors face another risk: if Democrats achieve better-than-expected victories in congressional and state-level elections, policy uncertainty surrounding data center construction, AI regulation, and tech company taxation could further weigh on AI supply chain stocks.

Currently, the correction in U.S. tech stocks has not stopped Wall Street analysts from anticipating another round of strong earnings. However, Ben McMillan, Chief Investment Officer at IDX Advisors, believes that Democratic criticism targeting data centers is intensifying, which could become a real risk facing the AI trade. He said he has been closely monitoring national and local polling, and noted that taking action against AI data centers appears to be becoming a core issue for Democrats.