Tesla and SpaceX shares fell in premarket trading on Wednesday after Democrats won big in the midterm elections, including the Texas governor's race. Elon Musk had spent heavily on Republican candidates who lost, while AI stocks moved in different directions.
Tesla dropped 3.5% in premarket trading on Wednesday as Democrats won a significant victory in the midterm elections. SpaceX was last trading down 3.8% as Republican candidates backed by Elon Musk suffered big losses.
Musk spent a record of at least $474 million on the midterms. Of that, $224 million went into Texas, where Republican Senate nominee Ken Paxton and Gov. Greg Abbott lost to Democrats.
Texas politics put Musk's companies in focus
Texas is where Tesla and SpaceX are based. Tesla's largest US car plant is near Austin and SpaceX launches from Starbase. Coinpedia reports the outcome could cause problems for Musk's companies there, which depend on state decisions on power, water, permits and tax breaks.
Gina Hinojosa, the projected winner over Abbott according to the Associated Press, has been outspoken in her support of a moratorium on AI data centers. SpaceX is currently building out multiple gigawatts of data center capacity, including projects in Texas. Musk said in a post on X that "Data centers in space looking pretty appealing right now", referring to his speculative plans to build AI infrastructure off-planet.
AI stocks move in different directions
The reaction across AI names was mixed. CoreWeave fell 2.6% and Iren fell 2.8%, while Oracle shed 1.3%. Nvidia, Alphabet, Meta, Amazon and Microsoft were all up around 1-2%, and AMD rose 6.8% after announcing earnings on Tuesday.
The Texas result adds to existing pressure on the AI trade. The Nasdaq-100 fell into correction territory to end October amid concerns that data center spending growth was slowing. According to Wells Fargo, 27% of planned data center gigawatts is in Texas.
Trading involves risk.
Risk Disclaimer
