Oracle shares fell as investors sold anything tied to AI data centers after Democrats' midterm wins. Investors are concerned that tighter political scrutiny will slow the build-out, and Oracle's significant debt raises the stakes for the company.
Oracle stock is down 7% as of 1:36 p.m. ET on Thursday, Nov. 5, after a post-election sell-off in AI infrastructure stocks turned into a rout. The broader market fell with it.
The S&P 500 and the Nasdaq Composite are down 4.1% and 5.3%, respectively, in one of their worst days so far in years, according to The Motley Fool.
Data center moratoriums drive the sell-off
Two days after the Democrats' midterm victory, investors are selling anything tied to AI data centers. They are concerned that tighter political scrutiny will slow the build-out.
A moratorium on data center development was a key part of many Democratic campaigns, especially in Texas, Georgia, and Ohio, each of which just elected a Democrat as governor. Texas alone accounts for about a quarter of the U.S. compute capacity due online by 2030 and is a key state in Oracle's AI build-out.
Oracle's debt raises the stakes
Oracle has taken on significant debt to fund its data center projects. As of August, the company had about $125 billion of debt, and much more off balance sheet.
The Motley Fool's writer argues that a major slowdown, or even a slight delay, could seriously endanger the company's prospects.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
