Microsoft Shares Slip as Nasdaq Nears Correction on AI Data-Center Worries

what happened

Microsoft shares dropped about 1.5% on Thursday morning, according to Gurufocus. The company chose not to enlarge its current data center agreement with AI infrastructure firm Nscale in Texas. The existing terms stay in place, yet an expansion that could have brought Nscale tens of billions of dollars in extra business is now off the table. A person familiar with the matter said the decision was made several months earlier, before Nscale filed for an IPO in September.

Nscale's IPO filing showed that Microsoft orders placed from September 2025 through April 2026 may reach as much as $43.8 billion by December 2033, not counting optional extensions. The company's reported contract value remains about $103 billion, the source added. Earlier, the two companies agreed to deploy around 200,000 Nvidia AI chips across data centers in the US and Europe. Microsoft also pulled out of a project in Loughton, England, where power hookup delays pushed availability into the 2030s. Nscale is now courting other clients for its Texas capacity, with Anthropic named among possible buyers.

The broader market is also losing ground, according to the Wall Street Journal. The tech-heavy Nasdaq Composite was on track to close in correction territory as investors weighed a possible data-center slowdown under Democratic leadership, following what the WSJ described as a midterm blue wave. Nebius Group fell 16%, CoreWeave 12% and Nvidia 8%, while the PHLX Semiconductor Index lost almost 10%. Microsoft and Meta gave back several points of Wednesday's gains. Every S&P 500 sector declined, including defensive utilities and consumer staples, while energy slipped slightly. Oil fell the day before as traders unwound bets on a wider Iran war after the midterms, but Brent stayed well below $100 a barrel.

why it matters

The signal matters because AI cloud providers and chipmakers depend on large data-center contracts, so a slower build-out can quickly change their revenue outlook. Investors are now questioning how durable AI infrastructure spending will be, which keeps pressure on the semiconductor group.

market impact

Chips and AI clouds: weaker data-center demand signals pressure Nvidia, Nebius and CoreWeave

• ▼Nasdaq Composite pressure down — sell-off in chips and AI clouds drags the tech-heavy index toward correction
• ▼Nvidia shares pressure down — weaker expectations for demand for data-center chips
• ▼PHLX Semiconductor Index pressure down — broad selling across chipmakers and AI infrastructure names

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