Shares of major technology companies rose on Wednesday after the Democratic sweep in the U.S. midterm elections. Amazon's stock jumped 8% to a three-month high. Apple and Microsoft each gained 6%. Alphabet increased by 5.7%, and Meta Platforms climbed 3.5%. These gains could add over $750 billion in market value among these five firms, according to Bloomberg. This rally follows a period of declines due to concerns over rising costs linked to the AI boom.
Data Center Stocks Decline
In contrast, stocks of data center operators and AI chipmakers fell sharply. CoreWeave dropped 11%, while Seagate Technology and SanDisk fell 8.2% and 10%, respectively. Concerns about increased scrutiny on data center construction have grown after the election results. Democrats have opposed new data centers, especially in Texas, which is expected to account for 30% of new compute capacity by 2030. UBS estimates that about 30% of planned data centers could be affected by the election outcome.
Dan Ives, founder of Yorkville Ives, said that Democratic control of the Senate could create "major hurdles for AI and tech legislation" over the next two years. However, some analysts remain positive about the overall AI market. They suggest that the sector's growth is unlikely to stop entirely.
Related coverage: Global Stocks Surge After Democrats Win US Midterm Elections, US Chip Stocks Recover After $2 Trillion Market Value Loss.
The election results may weigh on data center stocks and AI chipmakers. Increased regulatory scrutiny could slow infrastructure development. Investors will closely watch how this political shift affects spending in the tech sector. Upcoming earnings reports from major tech companies may provide insights into their strategies amid these regulatory changes.
Based on reporting by: livemint.com, businessinsider.com