Democratic candidates achieved sweeping victories in the November 2026 U.S. midterm elections, flipping gubernatorial seats in key states like Texas and Georgia. Driven by public backlash over rising utility costs and resource consumption, victorious candidates campaigned on halting data center expansion. The election results triggered a massive market selloff on November 5, erasing over $2.3 trillion from Wall Street as tech stocks plummeted over regulatory fears.
Broad stock market drops following election results
- ▪The S&P 500 Index dropped over 4% and the Nasdaq 100 fell 6.4% on November 5, 2026, erasing trillions in market value following the midterm election results
- ▪Nvidia shares dropped 9.3% on November 5, 2026, wiping out more than $400 billion in market capitalization
- ▪Asian semiconductor and tech stocks declined following the U.S. election, including a 4.8% drop in South Korea's Kospi and a 2.6% fall in Taiwan's benchmark index
Impact on data center operators and energy suppliers
- ▪U.S. data center operators Applied Digital, Terawulf, Core Scientific, and Iren saw premarket share price declines on November 4, 2026
- ▪J.P. Morgan said Power utility providers Vistra, NRG Energy, Constellation Energy, and Talen Energy face potential revenue risks from delayed data center construction
- ▪Morgan Stanley said Data center developers with significant Texas operations including Cipher Digital, MARA Holdings, SEI, and Galaxy Digital face heightened regulatory exposure
Exposure of neocloud providers
- ▪Baird Equity Research identified cloud providers Oracle and CoreWeave as vulnerable to potential data center construction freezes
- ▪Neocloud company Nebius rose nearly 2% while rival CoreWeave fell 0.32% in trading on November 4, 2026
Impact on tech hyperscalers
- ▪Florida Democratic gubernatorial candidate David Jolly pledged during his campaign to bar hyperscalers for a year starting on day one in office
- ▪Hyperscalers such as Amazon, Microsoft, and Alphabet may benefit by seeing increased valuation for their existing operational data center capacity
Democratic victories in 2026 gubernatorial elections
- ▪Democratic candidate Keisha Lance Bottoms defeated Republican Rick Jackson in the Georgia gubernatorial election
- ▪Texas Democratic Representative Gina Hinojosa defeated incumbent Republican Governor Greg Abbott in the November 3, 2026 gubernatorial election
- ▪In the November 3, 2026 U.S. midterm elections, Democratic candidates won victories across multiple states, including gubernatorial flips in Texas and Georgia
Democratic Senate election victories in 2026
- ▪Democratic State Representative James Talarico won a U.S. Senate seat in Texas against Republican Attorney General Ken Paxton
- ▪Democratic candidate Abdul El-Sayed won the U.S. Senate race against Republican Mike Rogers
- ▪Democratic candidate Sherrod Brown won back a U.S. Senate seat against Republican Jon Husted
Elected officials and Voters target data center expansion
- ▪Newly elected governors in Texas, Georgia, Michigan, and New Mexico campaigned on promises to stop or pause statewide data center construction
- ▪Approximately 40% to 45% of pending or planned U.S. data center capacity is located in states where newly elected Democratic governors pledged to curb development
- ▪Voters passed measures restricting data center development in at least 29 to 33 local jurisdictions across the country on November 3, 2026
- ▪Singh said Data center development curbs could prevent up to 10 gigawatts of capacity from coming online in 2027
Texas data center growth outlook
- ▪GLJ Research estimated on November 3, 2026, that Texas data center projects lacking electricity and environmental permits will likely relocate to Louisiana, Oklahoma, or nowhere
- ▪Goldman Sachs and SemiAnalysis estimated that Texas accounts for approximately 25% to 41% of planned future U.S. data center capacity
Voter opposition and concerns regarding local data centers
- ▪An NBC News Election Day poll found that 76 percent of surveyed voters opposed host data center developments in their local communities
- ▪Voter backlash against data centers stems from concerns over high electricity usage, water consumption, noise pollution, and rising local utility bills
- ▪A September 2026 Quinnipiac poll indicated nearly three in four Americans opposed local data centers, up from two-thirds in March 2026
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