Texas gubernatorial election triggers data center stock declines

Shares of Cipher Digital and CoreWeave fell following the election of Democrat Gina Hinojosa as the Governor of Texas, defeating Republican incumbent Greg Abbott. The market reaction follows Hinojosa’s campaign platform, which advocates for a moratorium on new data center developments.

Hinojosa has called for a pause on new projects until the state legislature can establish community protections regarding electricity costs, water supplies, and local approval processes. While the election does not immediately restrict existing facilities, the policy stance has impacted companies with significant Texas footprints.

CoreWeave, which has contracted 262 megawatts of capacity at a Core Scientific campus in Denton, saw its shares drop more than 9 percent in premarket trading. Cipher Digital experienced a more significant decline, with shares falling nearly 19 percent. Core Scientific is currently undergoing a $110 million fit-out in Denton to convert cryptocurrency mining space into high-performance computing and artificial intelligence workloads.