IREN Ltd. (NASDAQ:IREN) shares are falling Wednesday as Democratic victories in the midterm vote, including a win in Texas, raise fears that tougher regulation will delay data center projects and slow AI infrastructure growth.
- IREN stock is testing key support levels. Why did IREN hit a new low?
IREN Stock Falls as Democratic Wins Raise Data Center Fears
IREN shares are slipping, caught in a selloff of AI cloud companies after Democrats scored major midterm gains. Traders worry that the new balance of power will mean regulatory hurdles that hold up data center projects and slow the growth of AI infrastructure. Democrats now control the House and the Senate, and CNBC says the party is viewed as a champion of data center moratoriums.
Texas raised the loudest alarm. Democrat Gina Hinojosa ousted Republican Gov. Greg Abbott, who held the office, after pledging stricter limits on how data centers get built, starting with an immediate statewide freeze.
Wells Fargo estimates that Texas will host 27% of the gigawatts planned for U.S. data centers. Georgia is at 7%, and Pennsylvania and Ohio are at 5% each, and Democrats won or held the governor’s office in all three, so the four states together make up about 44% of planned capacity.
Analysts Warn of Slower AI Infrastructure Buildout
Yorkville Ives & Co’s Dan Ives wrote in a Wednesday note that the Democratic wave should “slow the pace” at which the country builds data centers in the coming years. Ives singled out Texas as a leading worry and described Hinojosa as a politician known for opposing data centers.
A Democratic Senate should also complicate AI legislation, Ives wrote, although President Donald Trump’s veto threats may force tech executives to negotiate with Congress.
AI stocks were already under strain. The Nasdaq-100 sank into a correction late in October on doubts about data center spending growth. Ohsung Kwon, the chief equity strategist at Wells Fargo, cautioned earlier in the week that a Texas win for Democrats might hit the sector with a rare worst-case blow.
IREN to Report Earnings Thursday
IREN faces its own test Thursday. It reports results for its first fiscal quarter after the market closes on Nov. 5, following a slide of nearly 45% across 30 days. Last quarter, IREN posted a 74-cent loss per share, bigger than the 49-cent loss analysts predicted, and its revenue of $137.2 million fell under the $142.32 million forecast.
This time, Benzinga Pro data show analysts forecasting a narrower 67-cent loss per share, on sales of $223.19 million, a jump of roughly 63%.
IREN Shares Are Tumbling
IREN Price Action: Iren shares were down 10.06% at $22.00 at the time of publication on Wednesday. The stock is trading at a new 52-week low, according to Benzinga Pro.
Image: Tigarto/Shutterstock.com
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