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It’s been brewing for a while, hasn’t it? A stock market meltdown that is. And yesterday (5 November) investors put tech stocks on the bonfire, sending the Nasdaq Composite tumbling 5.5%.
This pushed the tech-heavy index into correction territory (down more than 10% from its recent high). But with lots of uncertainty swirling about, things could get worse. Even the tech-light FTSE 100 has fallen 2.2% today.
As such, I think it’s time to at least prepare for a stock market crash.
Political backlash
In the last 18 months, the market has shrugged off tariffs, AI spending concerns, and the inflationary war in Iran. But the rather large straw that broke the camel’s back was the Democrats winning the US midterm elections.
According to recent Pew Research polling, around half of Americans have an unfavourable view of data centres. Reflecting this, many Democrats ran campaigns promising to slow the growth of data centres and AI.
Texas, which has 31 ongoing data centre projects, voted for a Democratic governor pledging a moratorium on new projects.
All this has fed into fears that the AI boom will slow, potentially impacting the US economy.
What am I doing?
Now, it’s never nice to see stocks plunging in your portfolio. And mine has been a sea of red this week because I own quite a few tech stocks.
Here are some of the AI-related drawdowns in my portfolio in the past month:
| One-month performance | |
| Nvidia | -24% |
| SpaceX (NASDAQ:SPCX) | -25% |
| TSMC | -26% |
| Raspberry Pi | -27% |
Evidently, these are some painful drops. And if the US economy starts cracking, there’s the potential for things to get even worse.
So, what am I doing? Nothing yet. In my experience, it’s not wise to make wholesale changes to a portfolio after a sudden sell-off. I was happy with the stocks I owned last week, and nothing has changed since.
The market had a similar meltdown in April 2025 when President Trump unleashed tariffs on the world. Before that it was Covid, and before that Trump’s first term and Brexit.
Yet each time the stock market went on to recover, and I don’t think it will be any different this time. But I have no idea when and neither does anybody else.
What interests me?
If tech stocks nosedive further though, I’ll look to buy more SpaceX shares.
That might sound like a daft idea given that the firm is headquartered in Texas, where it’s building an AI semiconductor manufacturing facility. If SpaceX faces stricter local environmental rules, that could slow down its pace of development.
On the other hand, I think this backlash against data centres strengthens the case for SpaceX putting AI satellites into orbit. This could bypass terrestrial cooling, land, and electrical grid constraints by harnessing abundant solar power.
Satellites with localised AI compute, where the results are beamed back from low-latency, sun-synchronous orbit, are the fastest way to scale given the growing difficulty of finding electrical power sources on Earth.
SpaceX.
Doing so won’t be straightforward, of course as SpaceX will need to overcome formidable engineering challenges. But it’s already defied the odds by putting over 11,100 Starlink satellites into orbit, as well as the giant reusable Starship rocket. I wouldn’t bet against it.
SpaceX stock is trading at 43 times forward earnings, according to Yahoo Finance. I think it’s worth a look after falling 25% in a month.
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Ben McPoland owns shares of Nvidia, Raspberry Pi, SpaceX and TSMC.
This story originally appeared on Motley Fool
