Netanyahu rivals seize on Democrats' sweep of US Congress, seeking his ouster

On November 4th, Democrats' sweeping victory in midterm elections propelled US tech giants' shares to new heights, as investors anticipated potential restrictions on data-center construction. Amazon rose 7.4% to its three-month high, while Meta Platforms, Alphabet, and Microsoft climbed between 2% and 6.3%, driving a Wall Street rally after a period of selling due to concerns over soaring AI costs.

Apple, which has avoided heavy AI spending, surged nearly 7% to a record high. If the gains persist, the five companies could collectively add over $750 billion in market value. This rally represents a stark contrast to their previous quarterly earnings, which revealed that once-profitable cloud giants were now heavily reliant on borrowing for AI infrastructure investments.

Microsoft was the sole exception, boasting $18.6 billion in cash flow. The surge followed Democrats' decisive midterm victories, which could accelerate a backlash against the energy-intensive, water-intensive, and noisy data centers crucial to the AI boom but facing growing local community opposition.

Art Hogan, chief market strategist at B. Riley Wealth, noted that the post-election landscape might bring slight slowdowns or bumps in future data-center construction. Hyperscalers already possess data centers, making their assets more valuable as an overbuild is unlikely. Slower data-center build-out could lead to reduced CapEx spending, impacting the tech giants.

The tech giants have been investing billions in capacity, with plans exceeding $740 billion this year, up from $400 billion last year. Smaller AI cloud rivals, such as CoreWeave and Nebius, have been struggling under debt-fueled expansion plans and facing a slowdown in construction due to potential data-center curbs.