AI infrastructure stocks fall after midterms on data-centre fears

What happened: AI infrastructure stocks sold off on Wednesday, 4 November, after the US midterm results. CNBC reported that investors reacted to the Democratic sweep, with concern about slower data-centre buildout and tougher regulation.

The numbers: CoreWeave fell about 10%, Micron fell 7% and Nvidia fell 3.17%. Microsoft and Amazon each rose more than 6%, according to CNBC's report on the midterms and AI data centres. CNBC's live market blog reported the Nasdaq had tumbled into correction territory.

The context: The strain predates the election. CoreWeave, Nebius and Iren each lost at least 30% in October.

The catch: Gina Hinojosa, the incoming Democratic governor of Texas, has proposed a statewide moratorium on new data-centre permits. Projects already under construction would reportedly be exempt.

Who's affected: Nomura said projects planned for 2028 face more exposure to permitting delays than those already under construction.

In their words: JPMorgan's James Sullivan, managing director and co-head of global fundamental research, said: "existing capacity is significantly more valuable now because of incremental supply constraints."

Why it matters: Existing data centres are now worth more to investors, because new supply is harder to add. Shares of companies building that supply took the hit.

What's next: The Texas moratorium is a proposal, not yet in force.