“The market’s moving from the promise of AI to the price of AI.” – Ted Parkhill, founder and CEO of Incline Investment Management, November 5, 2026
For years, Wall Street has bet heavily that artificial intelligence will transform the global economy. On Thursday, investors got a reminder that a transformative technology and a sound investment aren’t always the same thing.
The technology-heavy Nasdaq Composite plunged 5.5%, its worst one-day decline since April 2025. The selloff came as investors weighed the Democratic sweep of Congress in Tuesday’s midterms, which raised fears of tougher scrutiny of AI, especially data center construction. The Nasdaq 100, made up of the biggest names in the broader index, fell 6.4% and lost $2.5 trillion in market value in a single session. The Composite is now in correction territory, down nearly 12% from its October 6 record.
Parkhill’s comment, reported by Reuters and found at CNA, captures an important shift in the conversation. The election jolt hit an AI trade that was already shaky, as investors increasingly ask when the hundreds of billions of dollars going into AI infrastructure will produce returns large enough to justify the spending.
Parkhill isn’t an AI skeptic. “There’s no question that AI is going to be transformative for the world in the long run,” he said. “But that doesn’t mean every AI-related stock is currently priced appropriately. There’s going to be a lot of turmoil.”
Some analysts think the most lasting effects will be felt closer to home. Michael O’Rourke, chief market strategist at JonesTrading, told Reuters that Democrats’ gains in governors’ races point to a slower data center buildout as the theme that will stick.
Bruce Zaro of Granite Wealth Management expects communities to push back on projects “straining the power grid, straining the water systems,” and noted that many proposed facilities still need permits. UBS analysts estimate that roughly 30% of expected US data center capacity additions in 2028 could be at risk.
The coming months will test Wall Street’s confidence in AI, and the fight over its infrastructure may play out as much in statehouses – including Colorado’s – as in Washington, D.C.
For more on what Tuesday's election and Thursday's selloff could mean for AI – including the potential role of Colorado's newly elected Representative Manny Rutinel – see our companion feature, After the election, AI faces a reckoning on Wall Street and in DC.
