Steve Weiss Says the Midterms Just Put a Lid on AI Spending. Here’s Who Could Get Hurt
Chipmakers barely flinched when Democrats swept the midterms, but two stocks tied to AI data centers got hammered. A Texas permit freeze could explain the split, and it may reach your 401(k) even if you never bought an AI stock.
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Democrats’ sweeping midterm wins sent a shock through the AI infrastructure trade on Wednesday, and Halftime Report regular Steve Weiss offered a blunt explanation on CNBC. “The market is seeing the Democratic victory as forced control on CapEx,” Weiss said on November 4, 2026. He added that companies “won’t be able to spend what they committed to spending if there’s a moratorium on new data centers, particularly in Texas where 30% of all projects are,” a figure Steve Weiss cited on air.
Why Texas Sits at the Center of the Selloff
Democrats took control of both chambers of Congress, and three newly elected governors campaigned on limiting data center development, according to Fortune. In Texas, Gina Hinojosa beat Gov. Greg Abbott after promising a moratorium on data center construction and an end to subsidies and tax breaks for major developers. Georgia’s Keisha Lance Bottoms and Ohio’s Amy Acton made similar assurances.
Local voters piled on. As of Wednesday afternoon, they had approved 37 ballot measures limiting data centers, CBS News reported, citing Redbud Consulting. GLJ Research’s Gordon Johnson told CBS the Texas result could delay 13 gigawatts of planned data center power.
How Fewer Data Centers Squeeze AI Suppliers
Every new data center gets filled with chips and hooked up to power, cooling, and electrical gear. If fewer get built, those suppliers lose orders. Rob Sechan made the same point on the program: “If there’s going to be less data center build-out, there’s going to be pressure on the chips.”
Wednesday’s closing prices show where investors think the damage lands first:
| Company | Close | Daily Change |
|---|---|---|
| Vistra (NYSE:VST | VST Price Prediction) | $120.29 | -13.83% |
| Vertiv (NYSE:VRT) | $205.55 | -12.89% |
| NVIDIA (NASDAQ:NVDA) | $200.13 | -3.17% |
| Broadcom (NASDAQ:AVGO) | $325.48 | -2.00% |
Power and Cooling Names Took the Real Hit
That table shows a split. Vistra, a Texas-based power producer, and Vertiv, which sells power and cooling systems for data centers, each fell by double digits. NVIDIA and Broadcom slipped far less. That gap makes sense: chipmakers sell into data centers worldwide, so a project blocked in Texas can move to another state or country and still buy the same processors.
Power plants and grid contracts are tied to specific locations. A Texas permit freeze lands directly on a Texas power seller’s growth plans. (The power, cooling, and grid names behind the expansion are the ones we profiled in a free report on seven AI infrastructure suppliers that aren’t chipmakers.)
Vertiv traded in a wide range during the session. Shares opened at $217.165 and hit a low of $202.585, before closing at $205.55.
A Republican Legislature Could Blunt the Blow
Ariana Salvatore of Morgan Stanley (NYSE:MS) pushed back on the most dramatic reading. On the firm’s Thoughts on the Market podcast the same day, she said, “In Texas, the incoming Democratic governor would still face a Republican controlled state legislature, limiting the scope for some of the more ambitious changes.”
Johnson sees the opposite risk. Abbott himself halted new grid connection approvals for data centers in August pending an audit. “All the new governor has to do is keep it in place. She doesn’t need a new law to keep data center permits frozen,” Johnson told CBS. Both views can hold at once: a legislature can block new taxes and repeal of incentives, while an existing executive pause rolls forward.
What Retirement Investors in AI-Heavy Funds Should Track
Broad index funds carry large positions in chipmakers and the cloud providers funding the expansion, so a capex slowdown would reach 401(k) balances even for investors who never bought an AI stock directly. Key signals to watch:
- Hinojosa’s first moves: whether she continues Abbott’s permit pause by executive action after taking office.
- Georgia’s executive order: Bottoms said she would sign one immediately to pause construction.
- Hyperscaler capex guidance: whether cloud companies trim spending plans or shift projects to friendlier states on their next earnings calls.
- Relative performance: if power and cooling names keep lagging chipmakers, the market is pricing a local slowdown. A broad chip selloff would point to a cut in total AI spending, which matters more for index holders.
Weiss framed Wednesday’s drop as a cap on spending. The next few months of permits and guidance will show whether that cap holds or the money moves elsewhere.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
