AI, data-center stocks slip as Democratic sweep clouds expansion plans

Neocloud stocks, which have become a barometer of investor anxiety over heavy AI spending, fell, with CoreWeave and Nebius down 1.6% and 2.2%, 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% 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.

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% each, while IREN dropped 1.5%.

The weakness extended to utilities and equipment suppliers exposed to the buildout. GE Vernova fell 1.2%, while Constellation Energy slipped 0.7%.

Hyperscalers were mixed, with Amazon.com up nearly 1% and Microsoft flat. Chipmakers Nvidia, Intel and Broadcom fell between 0.4% and 1.5%.

Separately, Qualcomm plunged 10.2% after quarterly smartphone-chip sales missed Wall Street estimates.