{"id":441570,"date":"2026-11-05T03:40:05","date_gmt":"2026-11-04T20:40:05","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-market-is-telling-the-hyperscalers-its-happy-about-a-slower-data-center-buildout-441570\/"},"modified":"2026-11-05T03:40:05","modified_gmt":"2026-11-04T20:40:05","slug":"the-market-is-telling-the-hyperscalers-its-happy-about-a-slower-data-center-buildout","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/the-market-is-telling-the-hyperscalers-its-happy-about-a-slower-data-center-buildout-441570\/","title":{"rendered":"The market is telling the hyperscalers it’s happy about a slower data center buildout"},"content":{"rendered":"
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Perhaps the clearest takeaway from Tuesday’s US midterms is that data centers are unpopular. After a short-lived construction boom, they provide little ongoing employment and drive up local energy costs. There were 41 local votes on data center curbs and 40 of them are on track to win, with margins in the 75\/25% range.<\/p>\n

Microsoft and Amazon are heavily into the data center business, including huge plans to build more so they should be losers today, right? Wrong. Shares of those two are up around 7% and the market cheers a slower, smaller data center buildout. The market has been hating the massive spending on highly-inflated chips and data center supply chains.<\/p>\n

In effect, the market is saying that the government is doing for you what you should be doing. Now the companies themselves have been trying to sell Wall Street on data center economics but the cash demands are simply too high and the market has said that the risk-reward isn’t convincing.\u00a0<\/p>\n

At this point, there might be some reflexivity in company management. Now that they’ve seen how the stock reacts to data center curbs, they might slow their own ambitions to levels closer to matching free cash flow. If so, that could be a powerful tailwind for the stocks, which have struggled this year.<\/p>\n

Amazon is particularly compelling as its core business of goods delivery isn’t under threat from AI in the same way as a software company like Microsoft.\u00a0<\/p>\n<\/p>\n

The flipside is that the companies in the data center building business are struggling. The neoclouds and vendors are all down big today, along with the companies that would be contract to provide the power to the data centers.\u00a0<\/p>\n

Forthe next moves, watch what kind of agenda congressional Democrats set around AI and data centers. They have a wide menu of things to choose to go after, including rampant corruption. I tend to think that some level of oversight around AI is coming but I’m not sure they want to take on data centers at the national level.\u00a0<\/p>\n

Another spot to watch is in Texas and Ohio, where more than one-quarter of planned data center capacity is located. Both of the new Democratic governors campaigned against data centers and it will be critical to see how they plan to act.<\/p>\n

Most important those are voters, who have clearly showed they don’t want to pay higher electricity rates so OpenAI can run the data centers harder.<\/p>\n

This article was written by Adam Button at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Perhaps the clearest takeaway from Tuesday’s US midterms is that data centers are unpopular. After a short-lived construction boom, they provide little ongoing employment and drive up local energy costs. There were…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-441570","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/441570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=441570"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/441570\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=441570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=441570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=441570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}