Post-Election Rally Masks Sharp Split in AI Trade

According to CNBC, U.S. stocks rallied Wednesday after Democrats scored major victories in the midterm elections, but AI-related shares diverged as investors weighed the potential impact on data-center development. Amazon rose 7%, Microsoft gained more than 6% and Alphabet advanced almost 4%. CoreWeave fell almost 10%, Iren dropped 11% and Nebius slid about 6.5%. Democrats who support restrictions on data-center development won key governorships in Texas and Ohio, and voters approved measures restricting projects in localities across the country. Texas accounts for about 25% of data-center construction, according to Bernstein analysts. Jim Cramer said the results could make financing harder for smaller cloud-computing providers, while BMO Capital Markets analysts said investors would reassess policy exposure but existing backlogs and projects should still convert amid underlying demand growth.