AI stocks slide as Texas governor result raises data center risks

AI-linked stocks fell in overnight trading after Democrats made gains in the 2026 midterms, especially Gina Hinojosa’s projected victory over Republican Greg Abbott in the Texas governor’s race. Hinojosa has backed a moratorium on AI data center development, raising concerns that new limits could slow projects in a state central to the industry’s expansion. Nasdaq-100 futures dropped 0.8%, while the technology-sector XLK fund fell 2%. Data center-focused companies saw sharper declines: CoreWeave slid 7%, SpaceX 6%, Nebius 4%, and Oracle 4% on Robinhood.

Investors are weighing whether state and local governments will block, delay, or raise the cost of data center construction. Wells Fargo estimates that Texas accounts for 27% of planned U.S. data center capacity; Georgia accounts for 7%, and Ohio and Pennsylvania 5% each. Democrats were also projected to win or hold governorships in those states. The election results add to worries that spending by major cloud companies and private AI firms may slow, which had already pressured the Nasdaq-100 into correction territory at October’s end. Analysts warned that a Texas Democratic win could be a major downside risk for AI stocks, and that broader Democratic gains might trigger a market slump. Data centers, once welcomed as economic development projects, have become politically contentious, potentially giving officials an incentive to restrict them.