Democrats' Big Wins Reshapes the AI Trade

Dow Jones11-05

0736 GMT - The Democratic sweep of the U.S. midterm elections is reshaping market leadership among AI stocks, says Charu Chanana, Saxo Markets chief investment strategist, in a note. Opposition to data-center expansion has gained political momentum, creating headwinds for data-center operators, power-equipment suppliers and semiconductor companies, whose growth expectations depend heavily on rapid infrastructure expansion, she says. As a result, semiconductor stocks have suffered a selloff while established hyperscalers with existing computing capacity have been more resilient after the election results. China tech also offers another angle, with lower expectations, domestic policy support and growing AI capabilities providing a different source of potential returns, she adds.

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