Shares of Amazon surged 7.4% to a three-month high while Meta Platforms, Alphabet and Microsoft gained between 2% and 6.3% [File]
| Photo Credit: REUTERS
Democrats’ midterm election sweep sent shares in US tech giants soaring on Wednesday as investors bet that potential curbs on new data-centre construction could cement their grip on scarce computing power while easing pressure on strained cash flows.
Shares of Amazon surged 7.4% to a three-month high while Meta Platforms, Alphabet and Microsoft gained between 2% and 6.3%, powering a rally on Wall Street after days of selling fueled by fears over the AI boom’s soaring costs.
Apple, which has avoided Big Tech’s massive AI spending but is feeling the sting of an AI-fueled surge in memory chip prices, jumped nearly 7% to a record high.
If the gains hold, the five companies are on course to add more than $750 billion in combined market value.
The rally marks a sharp reversal for the battered cloud giants after their quarterly earnings showed how the AI infrastructure race was turning once cash-rich, debt-light companies into heavy spenders reliant on borrowing. Microsoft was the notable exception, with $18.6 billion in cash flow.
The gains followed landslide midterm victories for Democrats who oppose data centres, including in Texas, likely accelerating a backlash against the power-hungry, water-intensive and noisy facilities that are at the heart of the AI boom but increasingly unpopular with local communities.
“Conceptually, post-election, there may be a bit of a slowdown or some bumps in the road for future data-centre build-out,” said Art Hogan, chief market strategist at B. Riley Wealth.
“The hyperscalers (large tech companies) already have data centers, so those assets are more valuable now because there’s not going to be an overbuild of data centers. Also, if there’s a slower pace of data-center build-out, then there’s going to be a slower pace of CapEx spending. That certainly would impact the hyperscalers.”
The tech giants have been building capacity at a blistering pace, with plans to spend more than $740 billion this year, up from roughly $400 billion last year. That far outstrips smaller AI cloud rivals such as CoreWeave and Nebius.
Shares of smaller players including Applied Digital and Iren plunged between 6% and 13% on fears that curbs on data-centre construction could derail their debt-fueled expansion plans. The companies have been spending several times their revenue to meet a swelling backlog of orders.
“The biggest worry of the night for tech investors and the AI trade was around the state of Texas, where ~25%-30% of data-center gigawatts and capacity will come from,” said Dan Ives, senior managing director and tech analyst at Yorkville Ives.
“Now it will happen at a more measured pace, which is likely a good thing in the eyes of many investors.”
Published – November 05, 2026 10:03 am IST
