Trump's midterm drubbing demonstrates the power of data center opponents
QQQ•Democrats who campaigned against data center development won key state offices, prompting declines in data center and AI infrastructure stocks. Goldman Sachs said roughly 45% of planned U.S. data center capacity could be at risk from moratoriums, tighter regulations and reduced tax incentives.
1. Election results rattle stocks
Democrats who campaigned in part for data center moratoriums won gubernatorial races in Texas and Georgia, while Democrats also won in Michigan and Ohio. Data center opponents gained political influence as investors weighed the possibility of tougher regulation and slower construction.
2. Capacity faces potential risk
Goldman Sachs said victories in Texas, Michigan and Georgia could put roughly 45% of planned U.S. data center capacity at risk from potential construction moratoriums, tighter regulations and reduced tax incentives. Core Scientific shares fell 11.6% and Iren shares dropped 12.5%; other AI infrastructure and power companies also declined.
3. Analysts see varied outcomes
HSBC analysts said one possibility was more regulation and oversight rather than broad moratoriums, while data centers could also move from Texas to other states. Morgan Stanley analysts said Ohio's new governor created a significant risk of project delays there, including for a 10-gigawatt project involving Nvidia.
