Texas Races Could Pressure AI Trade as Nasdaq-100 Falls 10%

According to CNBC, Texas’ gubernatorial and Senate races are drawing attention as potential pressure points for the AI trade, which has weakened amid concerns about financing and valuations. The Nasdaq-100 fell 10% from a record set last month, entering correction territory, while the PHLX Semiconductor Index dropped about 19% over the past month and the Global X AI and Technology ETF declined about 10%. Wells Fargo estimates Texas accounts for 27% of data center capacity measured in gigawatts. A University of Houston survey found more than 80% of Texas voters were concerned about data centers’ effects on water supplies and electricity prices. Incumbent Republican Greg Abbott is seeking a fourth term against Democrat Gina Hinojosa, while Democrat James Talarico and Republican Ken Paxton are neck and neck in the Senate race. Abbott halted data-center permitting in September. Talarico has proposed ending certain tax subsidies and tightening labor, environmental and electricity-grid standards. Washington Analysis’ John Sonsalla said an outcome in which Talarico wins the Senate seat and Hinojosa defeats Abbott would have a more negative effect on the AI trade. Evercore ISI strategist Julian Emanuel said the Texas governor’s race could influence the AI sector, citing expectations that Abbott would lift the data-center moratorium while Hinojosa would maintain it.