CoreWeave Inc. (NASDAQ:CRWV), Nebius Group N.V. (NASDAQ:NBIS) and IREN Ltd. (NASDAQ:IREN) extended their selloff Thursday as investors reassessed the outlook for AI infrastructure following the U.S. midterm elections. Meanwhile, hyperscalers including Amazon.com Inc. (NASDAQ:AMZN), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), Microsoft Corp. (NASDAQ:MSFT) and Meta Platforms Inc. (NASDAQ:META) also fell but remained relatively better positioned because of their existing compute capacity.
Neocloud stocks fell more than 10% Thursday, extending Wednesday's losses. The hyperscalers declined about 2% to 4% after gaining Wednesday.
The broader market also sold off, with the Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) down nearly 5% and the State Street SPDR S&P 500 ETF Trust (NYSE:SPY) off almost 3%.
Lessin Says Existing Compute Gains Scarcity Value
The Information founder and CEO Jessica Lessin told CNBC on Thursday the election outcome could make new compute capacity harder to secure, increasing the value of infrastructure that Big Tech already controls.
She said hyperscalers with existing data centers and approved projects could benefit from tighter supply, while neoclouds and suppliers face greater pressure because future expansion plays a larger role in their valuations.
She still expects data-center projects to move forward, but said companies with established agreements with cities and towns may find it easier to expand existing sites than competitors seeking new approvals.
Lessin also said higher compute costs could weigh on AI developers such as Anthropic, though she described the company as relatively efficient compared with OpenAI.
Sigalos Flags Greater Neocloud Financing Risk
CNBC's MacKenzie Sigalos said on CNBC on Wednesday that Democratic control of both chambers creates a tougher political backdrop for AI and data-center development.
She pointed to 41 local data-center measures across 10 states, with 39 producing outcomes favoring some form of restriction.
Sigalos said neoclouds face greater immediate exposure because many have borrowed against GPUs, leaving them more vulnerable if construction delays prevent capacity from coming online as planned.
Hyperscalers, by contrast, often have established relationships with utilities, regulators and local communities, alongside significant existing infrastructure.
Citing Bank of America, Sigalos said companies with more permitted capacity, including Amazon, could benefit from stronger medium-term revenue and lower overcapacity risk.
She said the bigger challenge for hyperscalers sits further out, particularly for projects scheduled for 2028 and beyond.
UBS Sees 30% of 2028 Capacity at Risk
Reuters reported that investors are increasingly concerned congressional scrutiny could slow data-center development as public opposition to electricity and water usage grows.
UBS analysts estimated that about 30% of expected U.S. data-center capacity additions in 2028 could face risk from potential construction pauses, according to the report.
That threat could hit neoclouds and independent data-center operators harder because their growth depends on rapid capacity additions.
Reuters said CoreWeave, Nebius, Applied Digital Corp. (NASDAQ:APLD), Cipher Digital Inc. (NASDAQ:CIFR) and IREN sold off after the election, while some hyperscalers initially gained as investors bet that tighter construction could make existing facilities more valuable and restrain future spending.
Parkhill Says Investors Are Moving From Promise to Price
Incline Investment Management founder and CEO Ted Parkhill told Reuters that the market is shifting its focus from AI's potential toward the financial burden of building the infrastructure behind it.
"The market's moving from the promise of AI to the price of AI," Parkhill said.
He added that AI can remain transformative over the long term without every AI-linked stock deserving its current valuation.
"There's going to be a lot of turmoil," Parkhill said.
The changing political landscape sharpens the divide between hyperscalers that already control substantial compute, power agreements and permitted sites, and neoclouds that rely more heavily on financing and future construction to support growth.
Price Action: CoreWeave shares were down 10.60% at $43.29, Nebius Group shares were down 13.77% at $122.04, IREN shares were down 15.04% at $18.45, Amazon.com shares were down 2.93% at $258.24, Alphabet Class A shares were down 1.87% at $283.53, Microsoft shares were down 2.50% at $541.90 and Meta Platforms shares were down 4.19% at $603.58 at the time of publication on Thursday, according to market data.
