U.S. technology shares suffered a sharp Nov. 5 reversal as traders reassessed the pace and payoff of spending on artificial intelligence infrastructure, with storage-chip companies taking the heaviest losses. The Nasdaq Composite fell 5.52% to 24,315, while the Philadelphia Semiconductor Index dropped more than 12%, according to the market figures provided. The selling extended from memory suppliers into chip designers and AI hardware companies, underscoring how closely the sector is tied to expectations for new data-center construction.
Sandisk led the decline among storage-focused companies, falling 22.26%. Micron Technology dropped 17.46% and Western Digital lost 17.35%. AMD fell 17.26%, while Nvidia declined 9.26%, pulling the selloff beyond the memory market and into the processors and accelerators used in AI servers.
The S&P 500 declined 4.36% and the Dow Jones Industrial Average fell 3.44%, indicating that the pressure was not confined to a small group of semiconductor names. Yet the largest moves were concentrated in companies whose sales depend heavily on cloud operators and other large customers expanding computing capacity.
Data-center schedules move into focus
The session put a more practical question at the center of the AI trade: how quickly can announced data-center projects become powered, operational facilities that generate equipment orders and revenue?
Demand for computing infrastructure may remain strong, but the delivery process depends on factors that are often local. Power connections, transmission upgrades, land-use approvals, water requirements, construction labor and permitting can each alter a project's timeline. A delayed campus can push back purchases of servers, storage drives, memory chips and networking hardware even when the underlying customer commitment remains in place.
State and local policy debates have added another variable following the U.S. midterm elections. Data centers are drawing closer scrutiny over electricity consumption, land use, water demand and their effects on nearby communities. The outcome differs by jurisdiction: some projects may receive rapid approval, while others could face additional studies, utility negotiations or restrictions on their operating footprint.
That places more weight on construction milestones rather than only headline announcements of planned AI spending. A large project may be financially committed or pre-leased, yet still wait months or years for sufficient electricity and supporting infrastructure.
Construction pipeline remains historically tight
The available development data points to a market where demand for capacity remains high, even as power constraints complicate the buildout. CBRE reported that 7,481 megawatts of data-center capacity was under construction across eight major North American markets in the first half of 2026. That represented a 24.8% increase from the prior reporting period.
More than 80.4% of the construction pipeline had already been pre-leased, according to CBRE. Total operational supply across those eight markets stood at 10,903 megawatts, while vacancy had fallen to 1.4%.
These figures suggest that cloud and enterprise customers are securing capacity well before new facilities are completed. They also show why utilities and local governments have gained influence over the hardware supply chain. When available capacity is scarce and most planned space is spoken for, the timing of power delivery can determine when the next round of chip and storage purchases occurs.
The market reaction therefore appears less like a simple rejection of data-center demand than a repricing of execution risk. Semiconductor companies can report strong order books while traders question whether customers will install systems as quickly as previously expected.
Storage stocks face different cycle risks
The size of the declines in Sandisk, Micron and Western Digital also reflects the differences within the storage industry. Micron sells DRAM and NAND flash memory and has exposure to high-bandwidth memory, or HBM, a specialized product used alongside AI accelerators in advanced servers. Its results are influenced by both AI-server demand and the broader memory pricing cycle.
Sandisk is more closely exposed to NAND flash pricing and demand, a market that can move rapidly when customers adjust inventories or delay device and server purchases. Western Digital has greater exposure to hard-disk drives, which remain central to large-scale data storage despite the expansion of flash memory in higher-performance applications.
Micron's valuation became a focal point during the pullback. The company reported fiscal 2026 revenue of $133.188 billion and GAAP diluted earnings per share of $74.33. Based on its Nov. 5 closing price of $656.39, the figures imply a trailing price-to-earnings ratio of roughly 8.8. A low trailing multiple can indicate that traders expect earnings to decline, remain volatile, or prove difficult to sustain through the next memory cycle.
That calculation does not settle the debate around Micron's outlook. Memory markets have historically been shaped by supply additions, inventory adjustments and price swings, while the current AI investment cycle has introduced unusually strong demand for certain high-performance products. The question is whether demand for those products can offset any weakness in more conventional memory segments.
Crypto energy claims require a narrower reading
The stock-market selloff also revived arguments about electricity competition between AI data centers and cryptocurrency mining. Those links should be treated carefully. The supplied material cites an annual estimate of roughly 190 terawatt-hours for virtual-asset mining, but does not identify a source or methodology for that figure.
Mining operations and data centers can compete for electricity in certain regions, especially where generation capacity and grid connections are limited. Their economics, operating profiles and location decisions differ substantially, though. Data-center permitting disputes do not automatically translate into restrictions on decentralized networks or a uniform outlook for digital assets.
Nor does a reported negative correlation between a major cryptocurrency and the Nasdaq 100 establish a reliable hedge. Correlations shift with the measurement period and market conditions, and daily equity declines do not provide evidence that any digital asset will rise in response.
The more useful signals from the Nov. 5 selloff will come from operating cloud providers' capital-spending plans, memory and NAND prices, inventories, utilization rates, margins, power-connection progress and the conversion of pre-leased data-center space into live capacity. Those measures will show whether the correction was primarily a reset in expectations or the start of a slower equipment-order cycle.
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