US tech stocks rebound as data centre backlash unsettles investors

US technology shares showed signs of a partial recovery on Friday after fears of slower AI development triggered a global sell-off. The Nasdaq rose 1.33% in early trading after closing down by more than 5.5% on Thursday, when it lost an estimated $2.5tn (£1.9tn) in market value, according to Dow Jones data. Nvidia shares jumped by over 7%, while AMD gained about 12% and Micron rose more than 8%. The companies had not recovered their previous losses.

The downturn followed Democratic victories in the US midterm elections, including candidates who campaigned for tighter rules on AI and data centres and an end to tax deals for technology companies. Democrats won control of Congress, shifting the political backdrop for infrastructure expansion. President Donald Trump reiterated his support for the sector, describing data centres as lucrative opportunities and criticising leaders who oppose them.

Resistance to new infrastructure also surfaced in Europe, where activists breached the site of a proposed Microsoft data centre in Amsterdam amid concerns about local resources and environmental costs. Investors remain divided over whether the market moves reflect temporary volatility or a deeper reassessment of AI valuations. AlphaSimplex strategist Katy Kaminski said investors were increasingly scrutinising profitability, while Tech London Advocates founder Russ Shaw urged technology companies to make a stronger case for AI.