AI, data-center stocks slip as Democratic sweep clouds expansion plans
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Nov 5 : AI and data center-linked stocks slipped in premarket trading on Thursday as Democrats' sweeping US midterm victory raised concerns about potential hurdles to the industry's rapid expansion.
Neocloud stocks, which have become a barometer of investor anxiety over heavy AI spending, fell, with CoreWeave and Nebius down 1.6 per cent and 2.2 per cent, respectively.
Investors worry Democratic control of Congress could bring tougher scrutiny of the data-center industry, potentially slowing development at a time when public opposition to new facilities is already mounting.
Around 30 per cent of expected US data center capacity additions in 2028 could be at risk from potential construction pauses, UBS analysts estimated, highlighting the threat to an industry whose growth depends on a rapid buildout of new facilities.
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The political uncertainty adds to pressure on the broader AI trade, as investors increasingly question whether the enormous capital spending required to build AI infrastructure will generate sufficient returns.
Data-center operators Applied Digital and Cipher Digital fell about 1 per cent each, while IREN dropped 1.5 per cent.
The weakness extended to utilities and equipment suppliers exposed to the buildout. GE Vernova fell 1.2 per cent, while Constellation Energy slipped 0.7 per cent.
Hyperscalers were mixed, with Amazon.com up nearly 1 per cent and Microsoft flat. Chipmakers Nvidia, Intel and Broadcom fell between 0.4 per cent and 1.5 per cent.
Separately, Qualcomm plunged 10.2 per cent after quarterly smartphone-chip sales missed Wall Street estimates.
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