DT DTCR Global X Data Center REITs ETF Loading... : Investor Sentiment and Bull/Bear Views

Local, state and federal political backlash against data centers is real and getting worse. Of 40 data center referendums on Tuesday's ballot, 38 went against the industry, and voters recalled commissioners who approved a Meta project. The governor races in Ohio, Georgia and Texas cover about 40% of the data center pipeline. Texas was supposed to absorb spillover from other states, and its new governor plans to keep the moratorium until the legislature passes taxes and regulations. After Virginia's tax increase, Blackstone and Amazon pulled projects there. Democrats may also use the debt ceiling to push Trump to remove 100% expensing for data center capital equipment. Clifton's 'Boone Pickens rule' says bans only matter once the big states turn, and data center stocks peaked against the S&P 500 the week Virginia and Texas turned in June. He tells investors to cut capex forecasts (for example by 10%), carry that into earnings, and buy 'anything but data centers' (industrials, data center real estate, Caterpillar, semi equipment, power generation). Selling these after the election was the right move.

Performance within AI tech will diverge more by year-end. Large companies with strong earnings and free cash flow could benefit from stricter regulation because it eases near-term capex pressure. Data center operators, by contrast, could carry much of the burden.

Australia shows data-center projects are hitting local opposition, power constraints and planning delays, with only about one-third of announced projects likely to proceed. The projects are capital-intensive and precarious, so investors without project-level diligence should stay away from data-center providers.