CrowdStrike Holdings Inc. (NASDAQ:CRWD) shares are sliding Thursday as the cybersecurity software group drops on the midterms, with Democratic gains raising fears of tougher AI regulation.
- CrowdStrike Holdings shares are sliding. What’s weighing on CRWD shares?
CrowdStrike Stock Falls On AI Regulation Fears
CrowdStrike is sinking along with other cybersecurity software names after the midterms. Benzinga Pro says the move may reflect concerns that Democratic gains could bring stricter AI regulation, potentially slowing AI development and reducing demand for the data centers that power it.
That anxiety also hit the QQQ fund, which is packed with tech stocks, and it fell 5.80%. The selloff reached well beyond security stocks. All 11 sectors finished lower, and technology ranked last as the XLK fund dropped 7.16%.
Peers fell hard too: Palo Alto Networks slid roughly 8.85%, Rubrik 10.55%, Palantir 9.86% and Cloudflare 9.74%.
Analysts Warn of Slower AI Buildout
Yorkville Ives & Co analyst Dan Ives called the Democratic victories in both chambers of Congress a serious setback for AI infrastructure growth and a drag on the AI trade. In an investor note, Ives said the results should slow the construction of new data centers and weigh on AI development for several years.
Democratic control of the Senate, Ives wrote, will also make it much harder to pass AI and tech bills in the two years ahead. President Donald Trump’s threat to veto bills, however, could push big tech CEOs to negotiate with Congress.
Texas troubles Ives most. Democrat Gina Hinojosa’s upset of Gov. Greg Abbott puts the state’s data center plans at risk, Ives said, since Hinojosa is known for opposing data centers. Ives also expects pressure on SpaceX and said slower American AI growth might let China close the gap with the U.S. or move in front.
CRWD Shares Are Plunging
CRWD Price Action: CrowdStrike shares were down 8.10% at $221.47 at the time of publication on Thursday, according to Benzinga Pro.
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