IREN Ltd. shares dropped 10.06% to $22.00 at publication time on Wednesday amid a broader decline in AI cloud stocks following Democratic midterm gains. Benzinga Pro data show IREN trading at a fresh 52-week low. Traders fear that tighter regulation under the new political balance will delay data center construction and constrain AI infrastructure expansion.
Democrats now hold both chambers of Congress. CNBC says Democrats are seen as advocates of moratoriums on data centers. In Texas, Democrat Gina Hinojosa defeated Republican Governor Greg Abbott after promising tighter construction restrictions, beginning with an immediate statewide freeze.
Wells Fargo estimates that Texas will account for 27% of the gigawatts planned for U.S. data centers. Georgia accounts for 7% of planned capacity. Pennsylvania and Ohio each account for 5%. Democrats won or retained the governorships in Georgia, Pennsylvania and Ohio. Those states and Texas collectively represent about 44% of planned capacity.
Dan Ives of Yorkville Ives & Co wrote on Wednesday that Democratic gains should reduce the pace of U.S. data center construction over the coming years. Ives identified Texas as a particular concern and characterized Hinojosa as a known opponent of data centers. Ives wrote that Democratic control of the Senate should make AI legislation more difficult. However, Ives said President Donald Trump's veto threats may compel technology executives to negotiate with Congress.
AI stocks faced pressure before the election results. The Nasdaq-100 entered correction territory in late October amid doubts about growth in data center spending. Wells Fargo chief equity strategist Ohsung Kwon warned earlier in the week that a Democratic victory in Texas could deliver an unusually severe worst-case outcome for the sector.
IREN will announce first-fiscal-quarter earnings after trading ends on November 5, Thursday. IREN shares have lost nearly 45% over 30 days. In the preceding quarter, IREN recorded a loss of 74 cents per share against an expected loss of 49 cents. IREN generated $137.2 million in revenue, below the $142.32 million analysts had forecast. Benzinga Pro data show analysts expect a narrower loss of 67 cents per share for the first fiscal quarter. Analysts project revenue of $223.19 million, an increase of roughly 63%, according to Benzinga Pro data.
IREN Shares Drop 10% Amid Fears of AI Regulation and Construction Delays
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Summary
IREN shares dropped 10.06% to $22.00 as fear and greed index readings show rising caution among traders. Concerns over AI regulation and construction delays dominate on-chain data. Democrat Gina Hinojosa’s win in Texas threatens a statewide construction freeze, affecting 27% of U.S. data center plans. Democrats now control 44% of key states, raising concerns over slower infrastructure progress and tighter AI legislation.
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