Tech stocks recover after $2.5 trillion sell-off amid AI bubble fears
Chip stocks led a recovery from a $2.5 trillion market decline following a strong jobs report. The initial sell-off was driven by voter backlash against data centers, which threatens levered AI compute companies.
Tech markets recovered from a sell-off that wiped out approximately $2.5 trillion in value, with chip stocks leading the rebound following a strong jobs report. The initial decline was driven by voter anger toward data centers, as 41 of 42 anti-data center measures on U.S. ballots passed. This populist backlash threatens levered, pure-play AI compute companies like Anthropic, OpenAI, and CoreWeave, while diversified incumbents like Apple, Amazon, and Microsoft remain more resilient. Apple is noted as the best-performing Mag 7 stock year-to-date in 2026 after sitting out the AI arms race.
Anthropic's IPO is a key test of market sentiment, with major investors skeptical of its $1.5 trillion valuation. Calci odds for an IPO announcement before December fell from 85% to 57%. Scott Galloway argues that regulation acts as a moat for incumbents who already possess compute, while new entrants are hurt. He also notes that 93% of GDP growth has been driven by hyperscaler CapEx, and that the market is responding to the realization that AI revenues may not materialize, echoing the first internet crash. Galloway described the sell-off as a necessary correction to the AI bubble, driven by voter leverage over Silicon Valley and the realization that regulation favors incumbents over new, levered AI companies.