Shares of data center operators in the U.S. drop due to new Texas governor
The state was expected to account for up to 30% of all planned capacity by 2030; new authorities may obstruct this
CoreWeave shares lost 46% over the month, and on Wednesday, Nebius, Iren Limited, and other companies tied to data centers also came under pressure. SpaceX declined by 4%.
Democrats secured a majority in the Senate and the House of Representatives, as well as winning the Texas gubernatorial election. The state is considered one of the key hubs for data center development and was expected to provide 30% of the computing capacity set to emerge by 2030.
According to UBS estimates, the election results could impact approximately 30% of new data centers expected to be launched in the next two years. An NBC News exit poll also showed that over three-quarters of voters opposed the construction of such facilities in their communities.
Neocloud companies lease computing power to clients using artificial intelligence. Investors fear that the Democratic victory will create obstacles for project implementation and slow infrastructure spending growth.
Dan Ives, founder of research firm Yorkville Ives, believes that Democratic control of the Senate will significantly complicate the passage of laws for the technology sector over the next two years. Meanwhile, Hank Smith, head of investment strategy at Haverford Trust, expects only a slight slowdown in construction. In his view, slower spending growth will give the market time to assess the scale of investments and may reduce concerns over aggressive capital raising.
The share price decline followed a weak October for the sector, during which investors were troubled by the debt burden of neocloud companies, rising borrowing costs, high stock valuations, and signs of weakening business demand.
