How the Texas elections pushed Apple to a $5 trillion valuation, and why chip stocks actually fell ๐ณ
On the day after the US midterm elections, Wall Street celebrated. ๐ข
But beneath the celebration, a much more interesting message passed through the market, regarding the future of data centers. ๐จ
We connected the dots, and the chain actually begins in Texas.
What happened at the ballot box? ๐บ๐ธ
The Democrats won a majority in both houses of Congress.
And in Texas, Democrat Gina Hinojosa won the race for state governor. ๐
Why is this important for the stock market?
Because Hinojosa made data centers one of the central issues of her campaign. ๐ฉ
Back in July, she called on the current governor to declare a freeze on new data centers, "until a legislative session that puts Texans first." โ ๏ธ
Her claim: data centers "swallow all of our water" and all of our electricity. โ ๏ธ
A campaign statement quoted a resident who said that data centers draw 2.5 million gallons of water a day from the Brazos River and Lake Granbury. โ
And Texas is not just another state on the AI map.
It is responsible for more than 25% of the planned data center capacity in the US by 2030. ๐
Meaning, if someone slows down construction in Texas, they slow down a large part of the entire industry's plan. ๐ด
And the market reacted immediately: chip stocks, and the entire AI infrastructure value chain, reacted with declines ๐ฝ
The market priced in the possibility that ballot measures and new elected officials would restrict the construction of data centers.
So how did all of this reach Apple? ๐
This is where it gets really interesting.
AI data centers buy massive amounts of memory chips.
This demand pushed up the prices of DRAM and NAND chips, which are also in every iPhone and Mac. ๐ต
Amit Daryanani, an analyst at investment firm Evercore, wrote that Democrats could delay or block data center projects, and this could ease memory demand. ๐
According to him, "memory price inflation has been a significant headwind" for Apple. โ ๏ธ
Simply put, this is his call:
Fewer data centers = less pressure on memory chips = cheaper memory = lower costs for the iPhone maker. ๐ก
And this is what the result looks like on the screen: Apple ($AAPL) surged 6% to an all-time high, and its valuation crossed $5 trillion.๐
In a single day, the market said something clear: in a world where data centers are built slower, those who buy memory could profit, and those who sell it could pay. ๐
The big question now is whether the Texas ballot box is just a one-day headline, or the turning point of the data center raceโ