AI shares rebound as Nasdaq rises 1.1% on Friday

Shares in major artificial intelligence companies recovered some ground on Friday after two days of steep declines, as investors looked past immediate worries about regulation and borrowing costs. The tech-heavy Nasdaq index rose 1.1%, helping to halt a global sell-off that had swept markets earlier in the week.

Nvidia, the leading maker of chips used for AI, gained 2.8%, partially offsetting a 9.3% drop on Wednesday and a further 3.2% fall on Thursday. Other AI-related stocks also bounced back: CoreWeave, which provides cloud services for AI development, rose 6.3%; memory maker Micron Technology added 5.1%; and Lam Research, which supplies chip-making equipment, climbed 8.2% after announcing plans to buy back up to $25 billion of its own shares. The standout performer was IREN, a data centre operator focused on AI training, whose shares jumped 20% after quarterly results beat analyst expectations.

The recovery followed a bruising week driven by political uncertainty after the US midterm elections. With Democrats winning control of Congress, investors worried that stricter rules could be imposed on data centre construction, particularly in Texas, where many facilities are being built. Those centres consume large amounts of electricity, and some local residents have complained about rising power bills. Concerns about the high cost of borrowing for AI firms also weighed on sentiment.

Despite Friday's gains, US indices still ended the week lower. The S&P 500 edged up 0.3% on Friday but recorded a weekly loss of 2.7%, its biggest since April 2025. The Dow Jones Industrial Average slipped 0.5% on Friday, while Asian markets fared worse, with Tokyo and Seoul both down around 6%. Germany's DAX index lost 1.9% on the day. Strong US jobs data for October, released on Friday, added to expectations that the Federal Reserve could raise interest rates again in December, which would make it more expensive for AI companies to finance new data centres and equipment purchases.

While Democratic lawmakers now hold majorities in both chambers, President Donald Trump retains veto power over any legislation, a factor that may have tempered some of the week's worst fears.