As Democrats secured control of both chambers of Congress in the midterm elections, shares of some US cloud computing providers and data center suppliers declined.
Democrat Gina Hinojosa is set to become Governor of Texas, and Bank of America strategists had previously characterized this state-level election as a referendum between cost of living affordability and AI data centers.
Data center developer Cipher Digital, which has operational exposure in Texas, plunged as much as 22%, while Cleanspark fell 15%.
Following Hinojosa's victory, KBW downgraded both stocks from Outperform to Market Perform.
Analyst Stephen Glagola expects that heightened regulatory uncertainty will affect the timing of lease signings and reduce the likelihood of these companies reaching final agreements on their Texas projects.
Other AI computing-related stocks: Iren dropped 13%, CoreWeave fell 9.6%, Fermi declined 8.9%, and Nebius lost 7.2%.
Industrial companies supplying data centers: Vertiv fell 13%, GE Vernova dropped 12%, Bloom Energy declined 9.8%, and Caterpillar slid 6.6%.
Semiconductor stocks: Micron fell 6.6%, Intel dropped 5.7%, Nvidia declined 2.8%, and Broadcom lost 2.5%.
The largest cloud computing providers, known as hyperscalers, gained instead: Amazon rose 8.3%, Microsoft climbed 7%, Alphabet advanced 5.9%, and Oracle added 2.9%.
Large data center REITs showed mixed performance with relatively moderate swings: Equinix gained 1.5%, while Digital Realty fell 1.9%.
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