Texas Blue Wave Could Threaten 27% Of Planned U.S. Data Center Power. Here’s What It Means For CoreWeave, Iren, Nebius And Other Neocloud Stocks
Texas just flipped Democratic for the first time in decades, and the new governor-elect has data centers in her crosshairs. Neocloud stocks are already bleeding, but the real question is how much of their future capacity she can actually stop.
Neocloud stocks opened lower Wednesday, and the companies with the largest Texas operations fell the most. These early-session moves could still change. IREN (NASDAQ:IREN) fell 5.93% to $23.01, and CoreWeave (NASDAQ:CRWV) dropped 5.41% to $50.83. Galaxy Digital (NASDAQ:GLXY | GLXY Price Prediction), which owns the Helios campus in West Texas, slipped 4.25% to $16.11. Applied Digital (NASDAQ:APLD) lost 2.81%, and Nebius Group (NASDAQ:NBIS) gave up 1.8%.
Democrats swept the state’s top offices on Nov. 3, and Gov.-elect Gina Hinojosa campaigned on pausing new data center approvals. Research from Wells Fargo, as reported by BigGo Finance, shows Texas holds 27% of planned U.S. data center power capacity. Georgia holds 7% of planned capacity, and Ohio and Pennsylvania hold 5% each. Before the vote, Wells Fargo’s Ohsung Kwon called a Democratic win a “left-tail risk event” for the AI trade.
The selling began well before the election. The NASDAQ-100 Index was already in correction territory. Over the past month, CoreWeave is down 43.28%, IREN 44.9% and Nebius 38.67%. Per Stocktwits, hyperscalers fell between 0.4% and 1% in early overnight trading.
What Hinojosa Proposed, and What She Can Do Alone
These are campaign proposals. None of them is law yet. Per BigGo Finance, Hinojosa proposed pausing new data center permits until the legislature writes water, power and environmental rules. She also wants to repeal this exemption. The 20-year tax exemption applies to hyperscale data centers, and she says it costs at least $1 billion a year. In her view, Gov. Abbott’s partial pause in September did not go far enough. Per Stocktwits, she also wants data centers to pay for transmission and wants projects screened for their impact on the grid. Her proposals target new approvals, and it is unclear how they would affect projects that are already permitted or under construction.
The Texas Tribune calls the result “Texas’ first divided government in decades”. Republicans are expected to keep the Texas Senate, and control of the House was still undecided Wednesday morning. Repealing the tax exemption would require the legislature. As governor, Hinojosa can take executive action, call special sessions, make appointments and veto bills. In September she said, “We did not end one era of single party rule to usher in another.”
Which Neoclouds Have Texas Megawatts on the Line
On its Aug. 11 call, CoreWeave reported 1.5 GW of active power, 4.2 GW contracted and a $104 billion backlog, per MarketBeat. Galaxy’s Helios site has 800 MW of approved capacity, all of it leased to CoreWeave. CoreWeave has not disclosed what share of its capacity sits in Texas. Chief executive Michael Intrator said moratoriums “are going to impact where this infrastructure gets built.”
IREN says its development pipeline tops 5GW across Texas, Oklahoma, British Columbia, Australia and Spain. Per The Energy Mag, its Sweetwater campus is 2 GW, with 1.4 GW in Sweetwater 1. Co-CEO Daniel Roberts argued that “a tighter interconnection process should favor real and well-capitalized projects.”
Trading firm Liquid sees substantial Texas exposure at IREN and Galaxy. It sees less at Nebius and Applied Digital. Their core campuses are outside the state: Nebius in Pennsylvania and Missouri, and Applied Digital in North Dakota.
Why the Damage May Be Smaller Than Feared
Data centers can still get built. Newsletter author Tae Kim wrote that this requires developers to give up subsidies, promise union jobs and protect local water and electricity costs. One trader on Stocktwits said the fear was already priced in, and Brad Gerstner of Altimeter said a Democratic win could slow construction but called the policy fears possibly overblown. Applied Digital CEO Wes Cummins weighed in. He said tightening siting rules “actually increases the strategic value of our campuses that are already powered, operating, and supported by their communities.”
The broader point: whoever ends up building these campuses still needs the companies that power, cool and network them. We featured seven of those suppliers, away from the chipmakers, in a free report on the AI infrastructure buildout.
Signals to Track Before January
Keep an eye on four things. They are the final Texas House count, the January legislative session, any executive orders after Hinojosa takes office, and new company disclosures on Texas capacity. CoreWeave’s next quarterly report is the first chance to learn how many of its megawatts depend on Texas.
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AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
