AI data center stocks and Musk's companies take hits as Democrats take control

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data centersDemocratic Partypublic spendingmidterm electionsElon Musk

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• Elon Musk threatens Democrats who plan to launch investigations into him if they win back congressional power

  Democrats hope to win back congressional power in the November midterm elections, which could allow them to launch investigations into Elon Musk, including his role in the Department of Government Efficiency (DOGE) and his government contracts, according to Politico. Musk responded on X that he would find out who is really pulling the strings behind those who pick fights with him and go after them. DOGE is reported to have removed over 250,000 federal jobs; Musk first said it would cut $2 trillion in spending, later scaled that to $1 trillion, then estimated about $150 billion for fiscal 2025, while DOGE's official website claims $215 billion in savings. Musk is also accused of restricting the speed of SpaceX's Starshield satellites used by Ukraine's military, an allegation he denies. Musk is the largest individual political donor in modern U.S. history, and Musk-backed, Republican-aligned PACs have spent more than $400 million on midterm election ads, per the Washington Post.

  Yahoo Finance·24/10, 09:30▼ TSLAElon MuskDemocratic Partymidterm elections
• Elon Musk’s record election bet backfired. The backlash may reach beyond one billionaire

  Democrats' sweeping midterm victory was seen as a major rejection of Elon Musk and the AI industry, as backlash against President Donald Trump and his tech allies put political influence and debt-fueled data center buildout under sharper scrutiny. Musk spent at least $474 million on the midterms, including $224 million in Texas, yet his favored candidates Ken Paxton and Gov. Greg Abbott lost, and SpaceX and Tesla shares fell overnight. Democratic Governor-elect Gina Hinojosa has called for a moratorium on new data centers and an end to industry tax breaks, though Republicans still control the Legislature. Musk's America PAC spent nearly $87 million across 44 federal races, with more than $80 million, or 93% of its spending, going to races Republicans lost.

  CNBC·04/11, 10:54▼ TSLAElon Muskmidterm electionsDemocratic Party
• Midterm Takeaways: Tech billionaires suffer horrible night as Democrats drub Republicans

  Democrats took control of Congress on Tuesday night, a sharp rebuke to President Donald Trump and his economic record, as voters voiced frustration over rising prices, government corruption and the AI data center build-out. Democrats won key Texas races, with James Talarico defeating Ken Paxton for a U.S. Senate seat and Gina Hinojosa defeating Gov. Greg Abbott, the first Democratic governor of Texas since Ann Richards left office in 1995. Democrats also won in South Carolina, Ohio, Iowa, North Carolina, Georgia and New Hampshire, while many Trump-endorsed candidates lost. Elon Musk, the cycle's largest individual political donor, spent record sums backing Republicans without success, and his spending may have become a liability as voters raised concerns about billionaire influence. The result is expected to make Congress more adversarial toward tech companies and AI data center projects, and futures for the Dow and S&P 500 slipped as the gains became clear.

  CNBC·04/11, 07:03• TSLAmidterm electionsDemocratic PartyElon Musk
• US midterm elections reach decisive moment: What scenarios could unfold?

  On November 3, about 210 million registered voters will decide all 435 House seats, 35 of 100 Senate seats and governors in 36 states, determining which party controls Congress for the next two years. Republicans currently hold majorities in both chambers; Democrats need to gain 3 House seats and 4 Senate seats to take control. Since 1946, the president's party has typically lost an average of 26.5 House seats in midterm elections, according to George Washington University professor Todd Belt. Belt estimates about 35 House races could decide the majority and believes Democrats could gain roughly 15 seats. If Democrats win either chamber, non-government spending bills could stall, he said.

  CafeF·03/11, 00:00• DXY• SPYmidterm electionsUSDemocratic Party
• The Protest Vote That Wrecks Your Portfolio - The Daily Reckoning

  The column urges readers to vote in the election two weeks away, arguing that staying home or casting a protest vote hands power to the hard left. It uses Britain as an example: in July 2024, voters rejected the Conservatives but gave Keir Starmer's Labour a large parliamentary majority, and the author says the new government has pushed higher taxes and sweeping economic controls. It warns that the Democratic Socialists of America (DSA) could take control of the House if moderate voters sit out the election. France is presented as a long-term case, where about 45 years of rising spending, taxes and regulation have left it with heavy debt and weak business formation.

  dailyreckoning.com·20/10, 18:00midterm electionsDemocratic Partytaxes
• Defense stocks plummet as investors worry possible Dem midterms win could thwart Trump spending plans

  Defense stocks have fallen as investors fear a Democratic win in the midterms could block President Trump's plan to raise annual defense spending from $1 trillion to $1.5 trillion, a $500 billion increase that requires congressional approval. The iShares US Aerospace and Defense ETF, the sector's largest fund, fell 16% from early July to mid-October, while the S&P 500 rose 3.5%. Analysts say projects bearing Trump's name, such as the 'Golden Dome' and 'Trump class' battleships, could be at risk as defense spending has become a partisan issue. Northrop Grumman and L3 Harris are down 35% and 36% since early March, and Lockheed Martin is down more than 20% from its peak then, despite the Russia-Ukraine and Middle East conflicts.

  nypost.com·19/10, 21:45defenseDonald Trumpmidterm elections

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• 4 market-moving issues investors should watch now that the midterms are over

  The Democrats swept Tuesday's election, and the article says this could have far-reaching consequences for markets and the economy.

  MarketWatch·04/11, 19:12• QQQ• SPYmidterm electionsDemocratic PartySPY
• California's billionaire tax on track for defeat as the state continues to count votes

  California's Proposition 40 would impose a one-time 5% tax on residents and trusts with assets over $1 billion, affecting an estimated 200 billionaires, with revenue going mainly to healthcare, food assistance and education. With 60% of votes counted on Wednesday, the measure was trailing by over 11 percentage points, though the race had not yet been formally called. Big Tech opposition was fierce, with Google co-founder Sergey Brin reportedly contributing $102 million to a committee fighting the measure. Outgoing Governor Gavin Newsom also opposed it, arguing that billionaires would both dodge the tax and leave the state. Nationally, voters in Texas flipped a Senate seat to Democrats despite Elon Musk spending more than $200 million to keep it in Republican hands.

  Yahoo Finance·04/11, 19:08taxesbillionairesmidterm elections
• Credo Sinks 10% as Democratic Sweep Hits AI Data Center Stocks: “Biggest Worry”

  Credo Technology (CRDO) shares fell 10% alongside AI data center stocks after Democrats won both chambers of Congress and key governors' races, pledging tougher limits on data center construction. The biggest concern is Texas, where Democrat Gina Hinojosa beat Gov. Greg Abbott on a promise of an immediate data center moratorium; Dan Ives noted the state will supply around 25% to 30% of data center capacity. Active electrical cables supplied over 99% of Credo's revenue growth in fiscal 2026, and the article argues a Texas moratorium is a bigger threat to the $3.88 billion fiscal 2028 estimate than to this year's. Dell dropped 9% and Coherent fell 7%, while Amazon rose 7% as AWS sales grew 39%. Credo's forward P/E of 19x at Tuesday's close was its three-year low and far below its 63x average, and its early-December report will show whether customers are ordering fast enough to deliver growth above 85% this year.

  Yahoo Finance·04/11, 19:06▼ AMZN▼ NVDAdata centersartificial intelligenceNVDA
• Lucid Jumps 12%, Rivian Climbs 6% as Post-Election Rally Lifts EV Stocks; Tesla Slides 3%

  Lucid rose 12% to $3.38 and Rivian gained 6% to $14.04 as a post-election risk rally lifted smaller EV stocks, while Tesla fell 3% to $388.52 amid concerns over Democrats' control of Congress and its effect on Elon Musk's companies and AI build-out. Lucid's gain has little operational support: its Q3 2026 deliveries of 3,806 fell from a year earlier after production cuts, and the stock is still down 68% year to date. Rivian has a steadier footing, raising its 2026 delivery guidance to 67,000 to 70,000 vehicles after its R2 became its best-selling model by volume, though its free cash flow was negative $1.12 billion last quarter. Nio rose 4% to $3.31, and the article says its gain reflects a broad risk-on move more than U.S. policy specifics. Investors will watch Lucid's report next week for progress on its cash flow plan, with bulls pointing to robotaxi testing and bears to its stockholders' equity deficit, cash burn and a pending securities fraud lawsuit.

  Yahoo Finance·04/11, 19:04▼ TSLAelectric vehiclesTSLARivian
• A massive trade just happened in a leading mortgage lender: Watch Options Action Live

  After the Democratic wave in the midterms, stocks surged as options traders sold volatility and rotated away from big-tech trades; the S&P 500 rose just under 2% by midday Wednesday, recovering losses from Friday and Monday. The Cboe Volatility index fell about four points to below 17, its biggest one-day drop since at least July, while WTI crude traded below $90 and energy stocks fell 5.6%, the largest decline in the S&P 500. Options on the Energy Select Sector SPDR ETF (XLE) ran at more than three times their 30-day average, with 57% puts, and the top trade was the 62.5-strike put expiring Jan. 15, per SpotGamma data, suggesting a possible gradual reversal in the sector that has been 2026's best performer. Mortgage lender Rocket Companies, which fell almost 50% this year before recovering last month, saw options volume at double its average, with 90% of 110,000 contracts being calls. On the other side, the solar ETF TAN rose another 9% to its highest since July on volume more than five times average, while the semiconductor ETF SMH fell 2.6% to its lowest since May, with 70% of its options volume in puts.

  CNBC·04/11, 19:00optionsS&P 500oil prices
• Voters rebuff data centers in every ballot measure except one during the 2026 midterms

  Of 41 local ballot measures in 10 states that would have restricted data center construction, voters sided against data centers in all but one, in Harwood, North Dakota, where the city voted against a charter amendment requiring extra review of industrial developments, including data centers. The result came alongside Democratic wins in Ohio, where Sherrod Brown ousted Republican Sen. Jon Husted and Amy Acton defeated Vivek Ramaswamy, and in Texas, where Gina Hinojosa unseated Gov. Greg Abbott. Ohio is also home to OpenAI's planned 8-gigawatt campus, developed by SoftBank and SB Energy with the U.S. Department of Energy, which could cost more than $500 billion in total, with Nvidia also backstopping the project. In a CNBC Voter Poll, 56% of voters called data centers a crucial or major factor in their decision, with Democrats ranking the issue higher than Republicans. Democrats, including Rep. Greg Casar, are calling for AI executives to testify under oath, as hyperscalers such as Alphabet, Amazon, Microsoft and Meta keep spending hundreds of billions of dollars a year on AI infrastructure.

  CNBC·04/11, 18:58data centersmidterm electionsartificial intelligence