Tech stocks saw sharp moves this week as election results and AI spending concerns collided. Democrats won control of Congress in the US midterms, sparking fears that tighter regulation on data centers and AI infrastructure could slow the industry's rapid expansion. Nvidia, Meta, and Alphabet all posted steep losses, and investors grew cautious about whether the current AI spending boom is sustainable.
CoreWeave's bond yield climbed above 16%, signaling rising concern about financing costs for AI infrastructure. Default protection costs also rose for Nvidia, Broadcom, and Oracle, with Nvidia's credit default swap jumping 76% in a single month. Goldman Sachs warns that a potential moratorium could affect 45% of planned US data center capacity, though AI bond deals still reached $67 billion since late October.
On the hardware side, several companies are benefiting from the surge in AI spending. Marvell posted strong fiscal Q2 2027 revenue of $2.739 billion, up 36.55%, with data center revenue growing 46%. Despite this, the stock dropped 37.55% over the past month. Management raised its fiscal 2027 revenue outlook to roughly $12 billion and expects its custom chip business to more than double in fiscal 2028.
Micron is gaining analyst attention as a potential AI winner. At $846, the stock trades at about 5x fiscal 2027 earnings estimates, and 28 analysts have raised their forecasts. Micron has co-designed HBM4E memory with Nvidia, with volume production targeted for calendar 2027. Meanwhile, Onsemi reported AI data center revenue of $180 million, up 175% year over year, and expects about $620 million from AI data centers in 2026, doubling that figure in 2027.
Dell, Credo, and Broadcom are positioned to benefit from the AI spending boom. Dell booked $130 billion in AI server orders with a record $95 billion backlog. Broadcom expects Anthropic to become its largest XPU customer in 2027, and OpenAI's Jalapeno chip is on track for a 1.3 gigawatt deployment. Credo expects over $600 million in optical revenue in fiscal 2027. Hon Hai, also known as Foxconn, reported October sales of NT$1.31 trillion, a 46% jump driven by Nvidia server demand, though its shares are only 2% higher year to date.
Chip packaging is also seeing major investment. TSMC dominates CoWoS packaging used by Nvidia, AMD, and Broadcom, and revenue from advanced packaging is forecast to surpass traditional packaging for the first time in 2026, with spending expected to near $28 billion. Resonac, formed through an $8.8 billion merger between Showa Denko and Hitachi Chemical, is focusing on chip packaging and data center supply as AI demand grows.
In the AI model space, Thinking Machines Lab released Inkling 2 Small, a 594-billion-parameter Mixture-of-Experts model with 17 billion active parameters. It scored 31 on the Artificial Analysis Intelligence Index, making it the top-performing model built outside China. The model improved on agentic tasks and reduced hallucinations, with weights planned for open release under an Apache 2.0 license. Arm Holdings, whose CPU architecture powers Nvidia's Vera CPU, saw revenue of $1.289 billion in fiscal Q1 2027, up 22.4%, though its stock fell 33.8% over the past month.
Oracle is facing a Wall Street test after the tech selloff. The company reported 30% revenue growth to $19.3 billion, with cloud infrastructure revenue up 121% to $7.4 billion. Its future revenue backlog reached $664 billion, and it expects positive free cash flow by late fiscal 2028. The next earnings report on December 9 will be critical for investor confidence.
Key Takeaways
- <ul><li>Democrats winning the US midterms has sparked fears that tighter AI regulation could slow data center buildout, potentially stalling up to 30% of planned US facilities.</li><li>CoreWeave's bond yield topped 16% and Nvidia's CDS jumped 76% in one month, reflecting rising concern about AI infrastructure financing costs.</li><li>Marvell reported fiscal Q2 2027 revenue of $2.739 billion (up 36.55%) and raised its outlook to ~$12 billion, yet the stock fell 37.55% over the past month.</li><li>Micron co-designs HBM4E memory with Nvidia, targets volume production in calendar 2027, and trades at about 5x fiscal 2027 earnings with 28 analysts raising estimates.</li><li>Dell booked $130 billion in AI server orders with a record $95 billion backlog, while Broadcom expects Anthropic to become its largest XPU customer in 2027.</li><li>OpenAI's Jalapeno chip is on track for a 1.3 gigawatt deployment, and Hon Hai's October sales jumped 46% on Nvidia server demand.</li><li>Advanced chip packaging revenue is forecast to surpass traditional packaging for the first time in 2026, with spending nearing $28 billion.</li><li>Thinking Machines Lab's Inkling 2 Small scored 31 on the Artificial Analysis Intelligence Index, ranking as the top non-Chinese AI model.</li><li>Onsemi's AI data center revenue surged 175% year over year to $180 million, with expectations to double to ~$1.24 billion by 2027.</li><li>Oracle reported 30% revenue growth to $19.3 billion and cloud infrastructure revenue up 121% to $7.4 billion, with a $664 billion future revenue backlog.</li></ul>
Marvell stock drops sharply despite strong AI chip growth
Marvell shares fell 37.55% over the past month even though the company posted strong results. Fiscal Q2 2027 revenue reached $2.739 billion, up 36.55%, and data center revenue grew 46%. Management raised its fiscal 2027 revenue outlook to about $12 billion and expects custom chip business to more than double in fiscal 2028.
Micron stock could rise 85% as memory chip demand surges
Micron Technology is gaining attention as a potential AI stock winner. At $846, the stock trades at about 5x fiscal 2027 earnings estimates. Analysts expect fiscal 2027 EPS to rise to $176.5017, with 28 analysts raising estimates recently. Micron has co-designed HBM4E memory with NVIDIA, with volume production targeted for calendar 2027.
Dell Credo Broadcom stocks poised for AI gains
Dell, Credo, and Broadcom are three AI hardware stocks that could post strong gains in 2027. Dell has a $95 billion backlog and analysts expect $28.2013 in fiscal 2028 EPS. Credo expects over $600 million in optical revenue in fiscal 2027. Broadcom expects to double AI revenue and has tapped out the Tomahawk 7, the first 200-terabit-per-second Ethernet switch.
Arm stock slides as CPU demand grows for AI data centers
Arm Holdings shares fell 33.8% over the past month despite strong revenue growth. Fiscal Q1 2027 revenue of $1.289 billion rose 22.4% and beat estimates. Arm's CPU architecture powers NVIDIA's Vera CPU, and management sees the CPU market reaching $100 billion. Arm trades at 239 times trailing earnings, which is much higher than competitors NVIDIA and Qualcomm.
Dell Credo Broadcom set to benefit from AI spending boom
Dell booked $130 billion in AI server orders with a record $95 billion backlog. Credo expects more than $600 million in optical revenue in fiscal 2027 and its first 1.6T DSP revenue later that year. Broadcom expects Anthropic to become its largest XPU customer in 2027, and OpenAI's Jalapeno chip is on track for a 1.3 gigawatt deployment. All three companies have strong long-term returns and could reach round-number price targets.
Onsemi AI Data Center Sales Surge 175% as Chip Stock Gains Momentum
Onsemi reported AI data center revenue of $180 million, up 175% year over year. Management expects about $620 million from AI data centers in 2026 and plans to double that in 2027. The company also secured a $5.7 billion deal for Synaptics and started shipping to platforms including Google. Shares trade at 16x forward earnings, a discount to competitors Microchip and Texas Instruments.
Thinking Machines Launches Inkling 2 Small as Top Non-Chinese AI Model
Thinking Machines Lab released Inkling 2 Small, a 594-billion-parameter model with 17 billion active parameters. It scored 31 on the Artificial Analysis Intelligence Index, making it the top-performing model built outside China. The model improved sharply in agentic tasks and reduced hallucinations compared to its predecessor. Weights are planned for open release under an Apache 2.0 license next week.
Thinking Machines Inkling 2 Small Is a 594B MoE With 17B Active Parameters
Inkling 2 Small is a sparse Mixture-of-Experts model from Thinking Machines Lab with 594 billion total parameters and 17 billion active parameters. It scored 31 on the Artificial Analysis Intelligence Index and ranks fourth in its price class. The model performs best on SWE-Bench Pro v2 at 86.3% and trails on Terminal-Bench 4.0 at 13.1%. It is available on Tinker, with Apache 2.0 weights planned for future release.
Hon Hai October Sales Jump 46% on AI Server Demand
Hon Hai, also known as Foxconn, reported October sales of NT$1.31 trillion, a 46% increase driven by strong demand for Nvidia servers. Analysts had expected about a 30% rise for the quarter ending December, so the result exceeded expectations. The company still earns significant revenue from lower-margin work for Apple. Its shares are only 2% higher year to date despite the AI-driven growth.
AI Boom Drives Billions Into Advanced Chip Packaging
A global race to build AI infrastructure is fueling major investment in advanced chip packaging. Companies including Nvidia, AMD, and Taiwan-based firms are expanding production to meet demand. TSMC dominates CoWoS packaging used by Nvidia, AMD, and Broadcom. Revenue from advanced packaging is forecast to surpass traditional packaging for the first time in 2026, with spending expected to near $28 billion.
Tech stocks fall as AI regulation fears grow after US midterms
Global technology stocks dropped after Democrats won big in the US midterm elections. Investors worry Democrats will tighten rules on AI and data centers. Big companies like Nvidia, Meta, and Alphabet saw steep losses. The sell-off reflects fear that spending on AI infrastructure may slow down.
US midterms raise doubts about the AI bubble
The US midterm elections gave Democrats full control of Congress, sparking worries about an AI spending bubble. Leading Democrats campaigned against unchecked growth of data centers. The AI boom began after OpenAI released ChatGPT in late 2022. Goldman Sachs expects $1 trillion in AI investments in 2026. Investors now fear tighter rules could hurt returns.
CoreWeave bond yield tops 16% as AI financing costs rise
CoreWeave's bond yield climbed above 16%, showing rising investor worry about AI infrastructure spending. Default protection costs also rose for Nvidia, Broadcom, and Oracle. Nvidia's CDS jumped 76% in one month. Goldman Sachs says a moratorium could affect 45% of planned US data center capacity. Still, AI bond deals reached $67 billion since late October.
Oracle faces Wall Street test after AI stock selloff
Oracle fell nearly 7% before recovering after a sharp tech stock decline. The company reported 30% revenue growth to $19.3 billion and cloud infrastructure revenue up 121% to $7.4 billion. Its future revenue backlog reached $664 billion. Oracle expects positive free cash flow by late fiscal 2028. Its next earnings report on December 9 will test investor confidence.
Resonac bets $8.8 billion merger pays off in AI chip boom
Resonac was formed after Showa Denko bought Hitachi Chemical for about $8.8 billion. CEO Hidehito Takahashi says the risky deal is paying off as AI demand grows. The company makes advanced materials used in semiconductor chips. Resonac is focusing on chip packaging and data center supply. Managing Asia visited its center in Kawasaki, Japan, to discuss its strategy.
Democratic midterm win may slow US AI data centre boom
US Democrats won the midterm election, and analysts warn this could slow the nation's AI data centre buildout. Proposed project freezes in Texas and tighter federal rules could stall up to 30 per cent of planned US facilities. Wall Street forecasters cut their Big Tech infrastructure spending plans after the vote. Developers may need to downscale their capacity plans.
Sources
- Prediction: The Next Big AI Stock Winner Could Be Hiding in Plain Sight
- Nvidia Isn't the Only AI Stock That Could Surprise Wall Street in 2027
- The AI Boom Is Creating a New Set of Winners. These Stocks Stand Out
- The AI Chip Race Is Changing. This Could Matter More Than GPU Market Share
- The AI Boom Is Creating a New Set of Winners. These Stocks Stand Out
- Onsemi’s AI Data Center Sales Reportedly Grew 175%. Is That the Chip Stock’s New Story?
- Thinking Machines Releases Inkling 2 Small, To Become Top Scoring Non-Chinese Model On Artificial Analysis Intelligence Index Once Weights Release
- Thinking Machines Releases Inkling 2 Small, a 594B MoE With 17B Active
- Hon Hai October Sales Jump 46% on AI Server Demand
- AI boom turns chip packaging into the next battleground for semiconductors
- First Thing: Global tech stocks wobble over AI regulation fears after midterms
- Could the US midterms put a pin in the AI bubble?
- The AI ‘credit card’ is getting costlier as CoreWeave bond yield tops 16%
- Oracle Faces Major Wall Street Test After AI Selloff
- How an $8.8 billion deal transformed Resonac for the AI chip boom
- Does the Democratic midterm victory spell the end of US AI data centre boom?
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