Democrats Seize Congress: Data-Center Stocks Plunge Up to 21 Percent
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MENAFNCipher Digital sank 21% in intraday trading, the steepest drop among U.S. data-center names. Cloud computing provider CoreWeave shed 9.5%, and data-center operator Applied Digital fell 8.8%.
Investors were also rattled by the prospect of congressional hearings into the electricity and water consumption of new data centers, which compounded doubts over how fast companies can earn returns on their AI spending. Power producers tied to data-center projects in Texas fell as well: Vistra tumbled 15.4% and Constellation Energy lost 9.2%. Power equipment supplier GE Vernova dropped 11.5%.
The biggest cloud providers moved the other way. Amazon and Microsoft each jumped 6%, and Alphabet, Google’s parent company, gained 4.6%. A slowdown in construction could raise the value of existing data centers and ease pressure on these companies to pour money into new capacity.
Solar and health care climb
Solar stocks rallied as investors weighed the outlook for federal clean-energy incentives under a Democratic-led Congress. Inverter maker Enphase Energy rose 8.8%, panel manufacturer First Solar gained 8.4%, and residential installer Sunrun advanced 6.9%.
Hospital operators and health insurers also moved higher, with investors betting Democrats will press to restore enhanced Affordable Care Act subsidies and undo some Medicaid cuts. HCA Healthcare climbed 8.5%, while insurers Centene and Molina Healthcare rose 7.3% and 6.3%, respectively.
Defense and Trump-linked firms slide
Defense contractors retreated as investors questioned how much of President Donald Trump’s proposed $1.5 trillion defense budget could win approval in Congress. Northrop Grumman lost 3.7%, while RTX, Lockheed Martin and L3Harris Technologies each fell between 3% and 6%.
Companies linked to Trump and his close ally Elon Musk also posted losses. Trump Media & Technology Group plunged 13%, while Musk-led SpaceX and Tesla slipped 3.5% and 3.3%, respectively.
Private prison operators GEO Group and CoreCivic declined 3.8% and 2.1%, respectively. Both stocks had climbed since Trump’s 2024 election victory on expectations that his immigration crackdown would boost demand for detention facilities.
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