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July 5, 2026

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From a dental office basement to a trillion dollars: Is Micron the next Nvidia?

Business 7 Mins Read

The chip that could make or break Wall Street’s confidence in artificial intelligence no longer lives inside a flashy graphics processor.

Increasingly, it sits inside a memory module, and it is made by a company that started life in a Boise, Idaho, dental office basement in 1978.

For most of its four-decade existence, Micron Technology was the kind of stock serious investors avoided.

Memory chips, dynamic random-access memory, or DRAM, and its derivatives were a commodity.

The business ran in brutal cycles: a shortage would lift prices and profits, manufacturers would race to add capacity, supply would overshoot demand, prices would collapse, and the cycle would repeat.

MU was a trade, not an investment. Wall Street treated it accordingly. That story is being rewritten at speed.

Over the past year, Micron’s shares have surged roughly 700%, with 200% of those gains arriving in 2026 alone.

Last month, the company crossed a $1 trillion market capitalisation for the first time.

Its latest quarterly earnings delivered a 346% surge in revenue and gross margins of 84.9% surpassing, remarkably, those of Nvidia.

And in a stretch when AI and technology stocks were nursing heavy losses after questions over bubble-territory valuations began circulating on Wall Street, it was Micron’s blowout results that steadied nerves and reignited confidence that the AI trade still has runway.

Two years ago, that role belonged to Nvidia.

The question investors are now asking is whether it has quietly passed the baton.

How Nvidia wrote the bellwether playbook

To understand what Micron may be becoming, it helps to understand what Nvidia became.

In November 2022, when OpenAI launched ChatGPT and set off the current AI frenzy, Nvidia’s graphics processing units, originally designed for computer games, found themselves identified as the workhorses for training AI models.

Demand exploded. Between its October 2022 low and June 2024, Nvidia’s shares surged approximately 1,100%.

By mid-2024, it had briefly become the world’s most valuable company, with a market capitalisation of $3.34 trillion, and had joined the select grouping of mega-cap technology companies known as the Magnificent Seven alongside Alphabet, Meta, and others.

But Nvidia’s significance went beyond its own price. It became a barometer.

Investors read Nvidia’s earnings reports the way they read blockbuster economic releases, not just for what they said about one company, but for what they implied about the pace and health of the entire AI buildout.

Even when Nvidia itself traded flat after reporting, its supply chain partners, Taiwan Semiconductor, SK Hynix, and ASML, would often move sharply in anticipation or in the immediate aftermath of its numbers.

“It’s not just a single stock,” Arun Sai, multi-asset portfolio manager at Pictet Asset Management, told the Financial Times last year.

“It’s very unusual for people to read through it to the economy as a whole.” That power has not vanished.

In its latest first-quarter results, Nvidia posted revenue of $81.6 billion, up 85% on the year, while net income more than tripled to $58.3 billion.

Those are not the numbers of a company in decline.

But its shares fell 1.6% in after-hours trading following the release.

The market has become accustomed to Nvidia delivering stellar figures and was pricing in something closer to perfection.

Year to date, Nvidia’s shares have risen a modest 3%.

Over the past 12 months, the gain is approximately 22%, a respectable figure for most companies, but underwhelming by the standards of what the market has come to expect.

The Nvidia era of market-moving earnings is not over; it has simply become less dramatic.

How scarcity of memory birthed the Micron of today

Micron’s rise as a new bellwether flows from a structural shift in what AI actually needs to run.

Modern AI systems require enormous amounts of data positioned directly alongside the processors crunching it.

That makes memory, specifically high-bandwidth memory, or HBM, one of the scarcest and most valuable components in an AI server.

Without enough of it, even the fastest GPU becomes a bottleneck.

As that realisation spread through 2025, Micron stopped being valued as a commodity memory producer and began being treated as a strategic supplier to the AI ecosystem.

Only three companies in the world can manufacture HBM at scale: Micron, South Korea’s Samsung, and SK Hynix.

That oligopoly, combined with the surge in AI-related demand, has produced something unfamiliar for the memory industry: sustained pricing power.

Micron’s gross margins in its latest quarter stood at 84.9%, up from 74.9% the prior period and from just 39% a year earlier.

The company expects the HBM market it serves to grow to approximately $100 billion by 2028.

Where large technology companies once faced what commentators called an “Nvidia tax”, paying a premium for indispensable chips, some now speak of a “Micron tax,” a memory toll that hyperscalers and AI infrastructure builders simply have to absorb.

Apple has been an example on that front after it had to raise the prices of its devices due to surging memory costs.

How Micron stabilised markets

The significance of Micron’s new role crystallised earlier this month.

Markets had been rattled by concerns that AI spending was outpacing any near-term revenue visibility.

SpaceX’s $25 billion bond sale, arriving so soon after its IPO, led investors to wonder if Wall Street might be entering AI bubble territory.

Ludovic Subran, chief investment officer of Germany’s Allianz, which manages €800 billion in assets, warned that markets may be shifting from “a healthy boom, a stretched boom into bubble territory.”

AI and technology stocks sold off sharply.

Then Micron reported that revenue surged 346% for the quarter.

Profit came in at $28.2 billion, almost 15 times the figure posted in the same quarter a year earlier.

The company blew past analyst expectations on every key metric, sending its stock nearly 16% higher in after-hours trading.

The results did not just lift Micron.

They stabilised the broader AI trade.

Investors took them as confirmation that the demand underpinning the entire AI infrastructure buildout, however stretched valuations may have remained real and accelerated.

A cautionary tale, and what Micron is doing about it

Nvidia’s trajectory does, however, offer a warning.

Its dominant position in AI chips, once a near-monopoly, is under pressure.

OpenAI has unveiled a custom AI chip developed with Broadcom.

Qualcomm has struck supply deals with Microsoft and Meta.

Competition is arriving from several directions simultaneously.

Micron’s shareholders would do well to hold that lesson in mind.

The more immediate risk is the one built into memory’s DNA.

Micron’s latest revenue surge was driven substantially by dramatically higher prices, margins of 85% compared to 38% a year ago, telling that story plainly.

Nvidia’s 85% revenue growth, by contrast, is not similarly dependent on elevated pricing.

As analyst David Jagielski of The Motley Fool has noted, if demand were to slow or if memory supply were to catch up with demand, Micron’s valuation, which has risen sharply over the past year, would face a steep correction.

Micron’s management is aware of the history and is attempting to break it.

The company is pursuing long-term supply contracts that lock customers in and reduce exposure to spot-market pricing swings.

CEO Sanjay Mehrotra has argued that the supply crunch is structurally different this time, as new semiconductor fabrication plants take years to build, and next-generation memory has become significantly more complex to manufacture, meaning capacity cannot be added quickly enough to produce the oversupply gluts of previous cycles.

To back that argument, Micron is investing approximately $200 billion in manufacturing and research and development, including new memory fabrication plants in Boise, Idaho, and Syracuse, New York.

Whether Micron can hold Nvidia’s former position as Wall Street’s preferred instrument for reading the AI boom will depend on whether those structural arguments prove correct.

For now, the market has decided that the most important number in AI is not measured in teraflops. It is measured in gigabytes.

The post From a dental office basement to a trillion dollars: Is Micron the next Nvidia? appeared first on Invezz

Keep Reading
Business

Americans’ revolt against data centers is growing: how it could disrupt the AI trade

Business 8 Mins Read

The artificial intelligence boom has a people problem, and it is getting worse faster than most investors have noticed.

While Wall Street has spent the better part of three years fixating on chip stocks, hyperscaler spending, and the relentless march of AI valuations, a less glamorous drama has been unfolding in suburban town halls, county commission meetings, and online petitions from New Jersey to Michigan.

Ordinary Americans, armed with electricity bills, noise complaints, and a generalised anxiety about what artificial intelligence is doing to their lives, are pushing back against the physical infrastructure of the AI boom — and they are beginning to win.

In the first quarter of 2026, 75 data-centre projects worth a combined $130 billion were blocked or delayed by local opposition, according to Data Center Watch, a research firm backed by AI security company 10a Labs.

That is as many projects as faced that fate across the entirety of 2025.

The pace of resistance is accelerating precisely as the pace of construction is accelerating, creating a collision that the industry has been slow to take seriously.

Why communities are saying no

The grievances are varied, but they cluster around a handful of recurring concerns.

Power consumption sits at the top. Between 2018 and 2023, the share of total US electricity consumption represented by data centres rose from 1.9% to 4.4%, according to a study published in the journal Environmental Research Letters.

Projections for what comes next are stark: by the end of the decade, national average wholesale electricity costs could rise between 6% and 29%, with the increase driven primarily by data-centre expansion.

In Virginia, one of the epicentres of the country’s data-centre boom, electricity generation costs could spike by as much as 57%.

Water usage is a second flashpoint.

Data centres use enormous volumes of water for cooling, and in communities already managing drought risk or ageing infrastructure, the addition of a facility consuming millions of gallons annually is not an abstraction.

Residents have also cited the constant low-frequency hum emitted by large facilities, which critics argue could fundamentally alter the character of surrounding neighbourhoods and pose health concerns with prolonged exposure.

Then there is something harder to quantify but no less real.

A general psychological resistance to artificial intelligence has fused with the more concrete grievances, giving the movement an ideological dimension that purely economic arguments cannot easily address.

About 44% of Americans now oppose data-centre construction in the United States, against just 21% who support it, according to a Reuters/Ipsos poll conducted in June.

The gap widens sharply when the question becomes personal: asked whether they would support a data centre in their own community, 57% said no, while only 14% said yes.

“Something that has changed right now is that now we have people that are against data centres even though they don’t have a data centre in their backyard, because they see data centres as the embodiment of AI,” Miquel Vila, lead analyst at Data Center Watch, told Fortune.

“What they oppose is AI. They consider that stopping data centres is the way to stop AI development.”

Why Wall Street is beginning to pay attention to the protests

To appreciate why the financial stakes are significant, it helps to understand how thoroughly the data-centre buildout has underpinned the broader economy and equity markets.

Morgan Stanley estimates that hyperscalers like Microsoft, Amazon, Alphabet, and others will spend $800 billion on capital expenditures in 2026 — roughly the same amount that all non-technology S&P 500 companies combined spent on capex in 2025.

The Semiconductor Industry Association projects that government and industry will spend a further $4 trillion on data-centre infrastructure through 2028.

Data-centre construction spending has already topped $50 billion in a single month, surpassing total US public spending on transportation infrastructure including airports and subways, as Bloomberg reported.

AI enthusiasm has been almost entirely responsible for the S&P 500’s 84% rise since ChatGPT’s public launch in November 2022.

Goldman Sachs expects the AI investment theme to account for roughly half of all earnings growth over the next two years.

The lofty valuations of companies across the AI supply chain rest, to a significant degree, on the assumption that planned capacity will materialise.

A large portion of it may not.

“A lot of the commitments and the build-out of data centers where it’s easy has kind of been done, so you’re getting marginally more difficult,” said Todd Castagno, a managing director at Morgan Stanley in a New York Times report.

“From a markets perspective, expectations might be, maybe not reset, but realigned with the fact that it’s hard to put a couple trillion dollars in the ground in a short time.”

Cities including Tulsa, New Orleans, Birmingham and Ypsilanti Township in Michigan have implemented temporary bans on permitting or construction, as have dozens of other counties and towns, according to a database maintained by hedge fund Interconnected Capital.

Democrats and Republicans in 14 states have proposed construction pauses.

Maine’s legislature passed a temporary statewide moratorium in April, though it was subsequently vetoed by Governor Janet Mills.

Why the tech industry’s charm offensive may not be enough

The technology industry has responded with a concerted public relations effort.

Late last year, Meta spent more than $6 million on an advertising campaign across eight states and Washington DC, promoting the economic benefits of data centres to local communities.

OpenAI and Microsoft have publicly pledged to absorb the energy costs their facilities generate, a gesture aimed at defusing consumer anxiety about rising electricity bills.

Nvidia, Amazon, and Google have each announced technological advances they claim will significantly reduce data-centre water consumption.

Whether any of this is sufficient is genuinely unclear.

“The AI boom is fast approaching a moment of truth, as rapid growth and soaring valuations collide with ballooning capital expenditure, a public backlash and the challenges of real-life adoption,” Deutsche Bank analyst Cox wrote in a recent report.

The resistance, as Vila and others have noted, is no longer purely local.

It has taken on the character of a broader social movement, and social movements are not easily neutralised by folksy advertising.

Analysts debate magnitude of risk to AI-related stocks

For investors, the distribution of risk matters as much as its existence.

“Data-centre opposition is more of an emerging risk than an immediate pressure on AI-related stocks,” Gil Luria, head of technology research at DA Davidson, said in a Barron’s report.

The largest hyperscalers — Microsoft, Google, Amazon — have global footprints and enough redundancy to route investment around hostile localities. They are inconvenienced, not threatened.

The same cannot be said for smaller operators dependent on a handful of large projects.

“The smaller AI clouds are small enough, and have projects that are big enough, that losing a few projects is material,” Luria says.

CoreWeave, for instance, is facing organised resistance to a proposed facility in Kenilworth, New Jersey, that would draw 250 megawatts of electrical capacity — roughly a quarter of the company’s active capacity today.

An online petition calling for the project’s cancellation has gathered more than 11,000 signatures.

Logan Purk, a technology industry analyst at Edward Jones, believes that already extended construction timelines will lengthen further, ultimately reducing the total amount of capacity built.

The ripple effects would travel up the supply chain. “I do think the difficulty is not fully baked in,” Purk said in a New York Times report.

“If we assume tomorrow that data-centre construction stops because there’s no access to new power, the ripple effects across the semiconductor industry would be pretty substantial.”

The picks-and-shovels companies — the equipment and infrastructure suppliers whose fortunes are pegged to the volume of construction — are the most directly exposed.

The resistance might also create some winners

The backlash, however, is not without its beneficiaries.

Mark Guberti of The Motley Fool argues that operators who already have data centres built and generating revenue are quietly positioned to benefit.

“The presence of fewer data centers helps these companies charge higher prices for their AI infrastructure,” he says.

Among the names he points to are Iren and Terawulf, both of which have operational sites and a revenue base that a construction freeze would only make more valuable.

Edge data centres represent a separate category of potential winner.

“These types of data centers are much smaller than large-scale AI data centers that eat up multiple gigawatts of energy,” Guberti says.

“Protesters are less likely to rally against these types of data centers, and zoning requirements for them are less complex.”

These facilities consume far less power and water, present a significantly smaller target for organised opposition, and are considerably less likely to trigger the kind of community mobilisation that is stalling larger projects.

One Stop Solutions, which designs the hardware that forms the backbone of edge data-centre sites, is among the companies analysts have identified as a direct beneficiary of that shift.

Honeywell offers exposure to the same theme through its building automation division.

The business grew 8% year over year in the fourth quarter and accounted for roughly a fifth of the company’s total sales.

However, Honeywell is diversified across multiple industrial businesses, making it a less concentrated play on the edge data-centre theme than One Stop Solutions, which carries more risk but offers purer exposure for investors seeking growth.

The post Americans' revolt against data centers is growing: how it could disrupt the AI trade appeared first on Invezz

Keep Reading
Stock

From a dental office basement to a trillion dollars: Is Micron the next Nvidia?

Stock 7 Mins Read

The chip that could make or break Wall Street’s confidence in artificial intelligence no longer lives inside a flashy graphics processor.

Increasingly, it sits inside a memory module, and it is made by a company that started life in a Boise, Idaho, dental office basement in 1978.

For most of its four-decade existence, Micron Technology was the kind of stock serious investors avoided.

Memory chips, dynamic random-access memory, or DRAM, and its derivatives were a commodity.

The business ran in brutal cycles: a shortage would lift prices and profits, manufacturers would race to add capacity, supply would overshoot demand, prices would collapse, and the cycle would repeat.

MU was a trade, not an investment. Wall Street treated it accordingly. That story is being rewritten at speed.

Over the past year, Micron’s shares have surged roughly 700%, with 200% of those gains arriving in 2026 alone.

Last month, the company crossed a $1 trillion market capitalisation for the first time.

Its latest quarterly earnings delivered a 346% surge in revenue and gross margins of 84.9% surpassing, remarkably, those of Nvidia.

And in a stretch when AI and technology stocks were nursing heavy losses after questions over bubble-territory valuations began circulating on Wall Street, it was Micron’s blowout results that steadied nerves and reignited confidence that the AI trade still has runway.

Two years ago, that role belonged to Nvidia.

The question investors are now asking is whether it has quietly passed the baton.

How Nvidia wrote the bellwether playbook

To understand what Micron may be becoming, it helps to understand what Nvidia became.

In November 2022, when OpenAI launched ChatGPT and set off the current AI frenzy, Nvidia’s graphics processing units, originally designed for computer games, found themselves identified as the workhorses for training AI models.

Demand exploded. Between its October 2022 low and June 2024, Nvidia’s shares surged approximately 1,100%.

By mid-2024, it had briefly become the world’s most valuable company, with a market capitalisation of $3.34 trillion, and had joined the select grouping of mega-cap technology companies known as the Magnificent Seven alongside Alphabet, Meta, and others.

But Nvidia’s significance went beyond its own price. It became a barometer.

Investors read Nvidia’s earnings reports the way they read blockbuster economic releases, not just for what they said about one company, but for what they implied about the pace and health of the entire AI buildout.

Even when Nvidia itself traded flat after reporting, its supply chain partners, Taiwan Semiconductor, SK Hynix, and ASML, would often move sharply in anticipation or in the immediate aftermath of its numbers.

“It’s not just a single stock,” Arun Sai, multi-asset portfolio manager at Pictet Asset Management, told the Financial Times last year.

“It’s very unusual for people to read through it to the economy as a whole.” That power has not vanished.

In its latest first-quarter results, Nvidia posted revenue of $81.6 billion, up 85% on the year, while net income more than tripled to $58.3 billion.

Those are not the numbers of a company in decline.

But its shares fell 1.6% in after-hours trading following the release.

The market has become accustomed to Nvidia delivering stellar figures and was pricing in something closer to perfection.

Year to date, Nvidia’s shares have risen a modest 3%.

Over the past 12 months, the gain is approximately 22%, a respectable figure for most companies, but underwhelming by the standards of what the market has come to expect.

The Nvidia era of market-moving earnings is not over; it has simply become less dramatic.

How scarcity of memory birthed the Micron of today

Micron’s rise as a new bellwether flows from a structural shift in what AI actually needs to run.

Modern AI systems require enormous amounts of data positioned directly alongside the processors crunching it.

That makes memory, specifically high-bandwidth memory, or HBM, one of the scarcest and most valuable components in an AI server.

Without enough of it, even the fastest GPU becomes a bottleneck.

As that realisation spread through 2025, Micron stopped being valued as a commodity memory producer and began being treated as a strategic supplier to the AI ecosystem.

Only three companies in the world can manufacture HBM at scale: Micron, South Korea’s Samsung, and SK Hynix.

That oligopoly, combined with the surge in AI-related demand, has produced something unfamiliar for the memory industry: sustained pricing power.

Micron’s gross margins in its latest quarter stood at 84.9%, up from 74.9% the prior period and from just 39% a year earlier.

The company expects the HBM market it serves to grow to approximately $100 billion by 2028.

Where large technology companies once faced what commentators called an “Nvidia tax”, paying a premium for indispensable chips, some now speak of a “Micron tax,” a memory toll that hyperscalers and AI infrastructure builders simply have to absorb.

Apple has been an example on that front after it had to raise the prices of its devices due to surging memory costs.

How Micron stabilised markets

The significance of Micron’s new role crystallised earlier this month.

Markets had been rattled by concerns that AI spending was outpacing any near-term revenue visibility.

SpaceX’s $25 billion bond sale, arriving so soon after its IPO, led investors to wonder if Wall Street might be entering AI bubble territory.

Ludovic Subran, chief investment officer of Germany’s Allianz, which manages €800 billion in assets, warned that markets may be shifting from “a healthy boom, a stretched boom into bubble territory.”

AI and technology stocks sold off sharply.

Then Micron reported that revenue surged 346% for the quarter.

Profit came in at $28.2 billion, almost 15 times the figure posted in the same quarter a year earlier.

The company blew past analyst expectations on every key metric, sending its stock nearly 16% higher in after-hours trading.

The results did not just lift Micron.

They stabilised the broader AI trade.

Investors took them as confirmation that the demand underpinning the entire AI infrastructure buildout, however stretched valuations may have remained real and accelerated.

A cautionary tale, and what Micron is doing about it

Nvidia’s trajectory does, however, offer a warning.

Its dominant position in AI chips, once a near-monopoly, is under pressure.

OpenAI has unveiled a custom AI chip developed with Broadcom.

Qualcomm has struck supply deals with Microsoft and Meta.

Competition is arriving from several directions simultaneously.

Micron’s shareholders would do well to hold that lesson in mind.

The more immediate risk is the one built into memory’s DNA.

Micron’s latest revenue surge was driven substantially by dramatically higher prices, margins of 85% compared to 38% a year ago, telling that story plainly.

Nvidia’s 85% revenue growth, by contrast, is not similarly dependent on elevated pricing.

As analyst David Jagielski of The Motley Fool has noted, if demand were to slow or if memory supply were to catch up with demand, Micron’s valuation, which has risen sharply over the past year, would face a steep correction.

Micron’s management is aware of the history and is attempting to break it.

The company is pursuing long-term supply contracts that lock customers in and reduce exposure to spot-market pricing swings.

CEO Sanjay Mehrotra has argued that the supply crunch is structurally different this time, as new semiconductor fabrication plants take years to build, and next-generation memory has become significantly more complex to manufacture, meaning capacity cannot be added quickly enough to produce the oversupply gluts of previous cycles.

To back that argument, Micron is investing approximately $200 billion in manufacturing and research and development, including new memory fabrication plants in Boise, Idaho, and Syracuse, New York.

Whether Micron can hold Nvidia’s former position as Wall Street’s preferred instrument for reading the AI boom will depend on whether those structural arguments prove correct.

For now, the market has decided that the most important number in AI is not measured in teraflops. It is measured in gigabytes.

The post From a dental office basement to a trillion dollars: Is Micron the next Nvidia? appeared first on Invezz

Keep Reading
Stock

Americans’ revolt against data centers is growing: how it could disrupt the AI trade

Stock 8 Mins Read

The artificial intelligence boom has a people problem, and it is getting worse faster than most investors have noticed.

While Wall Street has spent the better part of three years fixating on chip stocks, hyperscaler spending, and the relentless march of AI valuations, a less glamorous drama has been unfolding in suburban town halls, county commission meetings, and online petitions from New Jersey to Michigan.

Ordinary Americans, armed with electricity bills, noise complaints, and a generalised anxiety about what artificial intelligence is doing to their lives, are pushing back against the physical infrastructure of the AI boom — and they are beginning to win.

In the first quarter of 2026, 75 data-centre projects worth a combined $130 billion were blocked or delayed by local opposition, according to Data Center Watch, a research firm backed by AI security company 10a Labs.

That is as many projects as faced that fate across the entirety of 2025.

The pace of resistance is accelerating precisely as the pace of construction is accelerating, creating a collision that the industry has been slow to take seriously.

Why communities are saying no

The grievances are varied, but they cluster around a handful of recurring concerns.

Power consumption sits at the top. Between 2018 and 2023, the share of total US electricity consumption represented by data centres rose from 1.9% to 4.4%, according to a study published in the journal Environmental Research Letters.

Projections for what comes next are stark: by the end of the decade, national average wholesale electricity costs could rise between 6% and 29%, with the increase driven primarily by data-centre expansion.

In Virginia, one of the epicentres of the country’s data-centre boom, electricity generation costs could spike by as much as 57%.

Water usage is a second flashpoint.

Data centres use enormous volumes of water for cooling, and in communities already managing drought risk or ageing infrastructure, the addition of a facility consuming millions of gallons annually is not an abstraction.

Residents have also cited the constant low-frequency hum emitted by large facilities, which critics argue could fundamentally alter the character of surrounding neighbourhoods and pose health concerns with prolonged exposure.

Then there is something harder to quantify but no less real.

A general psychological resistance to artificial intelligence has fused with the more concrete grievances, giving the movement an ideological dimension that purely economic arguments cannot easily address.

About 44% of Americans now oppose data-centre construction in the United States, against just 21% who support it, according to a Reuters/Ipsos poll conducted in June.

The gap widens sharply when the question becomes personal: asked whether they would support a data centre in their own community, 57% said no, while only 14% said yes.

“Something that has changed right now is that now we have people that are against data centres even though they don’t have a data centre in their backyard, because they see data centres as the embodiment of AI,” Miquel Vila, lead analyst at Data Center Watch, told Fortune.

“What they oppose is AI. They consider that stopping data centres is the way to stop AI development.”

Why Wall Street is beginning to pay attention to the protests

To appreciate why the financial stakes are significant, it helps to understand how thoroughly the data-centre buildout has underpinned the broader economy and equity markets.

Morgan Stanley estimates that hyperscalers like Microsoft, Amazon, Alphabet, and others will spend $800 billion on capital expenditures in 2026 — roughly the same amount that all non-technology S&P 500 companies combined spent on capex in 2025.

The Semiconductor Industry Association projects that government and industry will spend a further $4 trillion on data-centre infrastructure through 2028.

Data-centre construction spending has already topped $50 billion in a single month, surpassing total US public spending on transportation infrastructure including airports and subways, as Bloomberg reported.

AI enthusiasm has been almost entirely responsible for the S&P 500’s 84% rise since ChatGPT’s public launch in November 2022.

Goldman Sachs expects the AI investment theme to account for roughly half of all earnings growth over the next two years.

The lofty valuations of companies across the AI supply chain rest, to a significant degree, on the assumption that planned capacity will materialise.

A large portion of it may not.

“A lot of the commitments and the build-out of data centers where it’s easy has kind of been done, so you’re getting marginally more difficult,” said Todd Castagno, a managing director at Morgan Stanley in a New York Times report.

“From a markets perspective, expectations might be, maybe not reset, but realigned with the fact that it’s hard to put a couple trillion dollars in the ground in a short time.”

Cities including Tulsa, New Orleans, Birmingham and Ypsilanti Township in Michigan have implemented temporary bans on permitting or construction, as have dozens of other counties and towns, according to a database maintained by hedge fund Interconnected Capital.

Democrats and Republicans in 14 states have proposed construction pauses.

Maine’s legislature passed a temporary statewide moratorium in April, though it was subsequently vetoed by Governor Janet Mills.

Why the tech industry’s charm offensive may not be enough

The technology industry has responded with a concerted public relations effort.

Late last year, Meta spent more than $6 million on an advertising campaign across eight states and Washington DC, promoting the economic benefits of data centres to local communities.

OpenAI and Microsoft have publicly pledged to absorb the energy costs their facilities generate, a gesture aimed at defusing consumer anxiety about rising electricity bills.

Nvidia, Amazon, and Google have each announced technological advances they claim will significantly reduce data-centre water consumption.

Whether any of this is sufficient is genuinely unclear.

“The AI boom is fast approaching a moment of truth, as rapid growth and soaring valuations collide with ballooning capital expenditure, a public backlash and the challenges of real-life adoption,” Deutsche Bank analyst Cox wrote in a recent report.

The resistance, as Vila and others have noted, is no longer purely local.

It has taken on the character of a broader social movement, and social movements are not easily neutralised by folksy advertising.

Analysts debate magnitude of risk to AI-related stocks

For investors, the distribution of risk matters as much as its existence.

“Data-centre opposition is more of an emerging risk than an immediate pressure on AI-related stocks,” Gil Luria, head of technology research at DA Davidson, said in a Barron’s report.

The largest hyperscalers — Microsoft, Google, Amazon — have global footprints and enough redundancy to route investment around hostile localities. They are inconvenienced, not threatened.

The same cannot be said for smaller operators dependent on a handful of large projects.

“The smaller AI clouds are small enough, and have projects that are big enough, that losing a few projects is material,” Luria says.

CoreWeave, for instance, is facing organised resistance to a proposed facility in Kenilworth, New Jersey, that would draw 250 megawatts of electrical capacity — roughly a quarter of the company’s active capacity today.

An online petition calling for the project’s cancellation has gathered more than 11,000 signatures.

Logan Purk, a technology industry analyst at Edward Jones, believes that already extended construction timelines will lengthen further, ultimately reducing the total amount of capacity built.

The ripple effects would travel up the supply chain. “I do think the difficulty is not fully baked in,” Purk said in a New York Times report.

“If we assume tomorrow that data-centre construction stops because there’s no access to new power, the ripple effects across the semiconductor industry would be pretty substantial.”

The picks-and-shovels companies — the equipment and infrastructure suppliers whose fortunes are pegged to the volume of construction — are the most directly exposed.

The resistance might also create some winners

The backlash, however, is not without its beneficiaries.

Mark Guberti of The Motley Fool argues that operators who already have data centres built and generating revenue are quietly positioned to benefit.

“The presence of fewer data centers helps these companies charge higher prices for their AI infrastructure,” he says.

Among the names he points to are Iren and Terawulf, both of which have operational sites and a revenue base that a construction freeze would only make more valuable.

Edge data centres represent a separate category of potential winner.

“These types of data centers are much smaller than large-scale AI data centers that eat up multiple gigawatts of energy,” Guberti says.

“Protesters are less likely to rally against these types of data centers, and zoning requirements for them are less complex.”

These facilities consume far less power and water, present a significantly smaller target for organised opposition, and are considerably less likely to trigger the kind of community mobilisation that is stalling larger projects.

One Stop Solutions, which designs the hardware that forms the backbone of edge data-centre sites, is among the companies analysts have identified as a direct beneficiary of that shift.

Honeywell offers exposure to the same theme through its building automation division.

The business grew 8% year over year in the fourth quarter and accounted for roughly a fifth of the company’s total sales.

However, Honeywell is diversified across multiple industrial businesses, making it a less concentrated play on the edge data-centre theme than One Stop Solutions, which carries more risk but offers purer exposure for investors seeking growth.

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Evening digest: European stocks hit records, Bitcoin tops $62K

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Europe’s major stock markets ended higher on Friday, with the STOXX 600 and Germany’s DAX hitting record highs as investors rotated into cyclical sectors.

Bitcoin climbed above $62,000 as large holders accumulated coins despite record ETF outflows.

Tesla expanded its robotaxi service to Miami as competition in autonomous driving intensified.

Poland’s prime minister warned that the coming months could be “critical” amid reports of a potential Russian provocation.

European markets hit record highs

European equities closed higher on Friday, with the STOXX 600 rising 0.7% to a record close after touching an intraday high of 652.35.

The index recorded its strongest weekly gain since mid-May. Germany’s DAX advanced 0.8% to another all-time closing high.

In the UK, the FTSE 100 added 0.2% to 10,679.03, while the FTSE 250 rose 0.5%, securing weekly gains for both indices.

The rally was driven by cyclical sectors, including industrials, financials and defense stocks, as investors broadened exposure beyond technology.

Defense stocks rose 0.7% after Russia launched its deadliest strike on Ukraine this year, reinforcing expectations for higher European defense spending.

Banks, financial services and industrials also advanced during the week, supported by easing geopolitical tensions in the Middle East.

Among individual movers, Siemens gained 2.6% after Kepler Cheuvreux upgraded the stock to “hold” from “reduce.” Semiconductor-related names also rallied, with Aixtron up 6%, Soitec up 5%, and BE Semiconductor Industries gaining 4.2%.

Bitcoin climbs above $62,000 on whale accumulation

Bitcoin rose to as high as $62,550, its strongest level since June 24, according to CoinMarketCap data, as global markets remained closed for the US Independence Day holiday.

Market participants said the move reflected steady buying, though resistance remains nearby.

Trader Daan Crypto Trades highlighted the 200-week simple moving average near $62,652, stating: “It is key for BTC now to hold this breakout and maintain its low timeframe bullish market structure.”

According to Bitfinex analysts, wallets identified as whales accumulated more than 270,000 Bitcoin worth about $16.7 billion over two weeks, even as US spot Bitcoin ETFs recorded $4.06 billion in outflows during June.

“The knee-jerk reaction from investors was to push stock index futures higher, signaling a regime where bad economic news is good for stocks due to the impact on the rate outlook,” Mosaic Asset Company said.

Tesla expands Robotaxi service to Miami

Tesla expanded its robotaxi service to Miami on Friday, marking another step in its autonomous driving rollout. The company said: “Robotaxi now available in Miami,” in a post on X.

The move follows launches in Austin, Dallas and Houston as Tesla continues expanding its self-driving platform.

Competition in the sector is intensifying, with Alphabet’s Waymo and Amazon’s Zoox also scaling operations.

According to Texas regulatory filings, Tesla operates 42 robotaxis in the state, compared with 577 vehicles registered by Waymo in Texas.

Tesla said in April it was preparing to expand robotaxi operations to five additional cities, though Elon Musk has said the network is unlikely to generate meaningful revenue this year.

Poland warns of possible Russian threat escalation

Poland’s prime minister Donald Tusk said the country is preparing for “various” scenarios as concerns grow over potential Russian actions in the region.

“I don’t mean to scare anyone but the coming months may truly be critical, also due to the changing nature of the war. These concerns are particularly palpable in the Baltic states,” Tusk told reporters on Friday.

Reports cited by Polish media suggested Moscow could be planning a provocation targeting NATO territory to test allied resolve, though no official confirmation was provided.

The White House and US State Department did not comment on the reports.

Tusk added: “Let’s not be afraid, we are preparing for various situations, but we cannot ignore them… We are aware of the threats, also thanks to information from our allies”.

NATO leaders are expected to meet in Turkey next week, where defence spending and support for Ukraine will be key topics.

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Wall Street’s big test: 5 factors investors can’t ignore next week

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Wall Street will enter the July 6-10 week with less room for error after a choppy start to the second half.

The S&P 500 is still sitting near record territory, but the market is carrying a tricky mix of stretched valuations, a cooling labour market, fragile oil prices and fresh pressure in semiconductor stocks.

The centrepiece will be Wednesday’s FOMC minutes, the first deeper look at Kevin Warsh’s debut meeting as Federal Reserve chair.

With investors already debating whether the June jobs slowdown reduces the odds of a near-term rate hike, every data point next week could matter more than usual.

5 factors investors can’t ignore next week

1. FOMC minutes: First real read on Warsh’s Fed

The biggest event lands on Wednesday, when investors get the minutes from the Fed’s June meeting.

That meeting was Warsh’s first as chair, and it left markets with a hawkish dot-plot message: nine of 18 officials projected that rates would end 2026 above the current 3.5%-3.75% range.

The minutes will be parsed for how strongly officials debated inflation, oil prices and the timing of any hike.

The June jobs report gave the Fed some cover to wait, with payrolls rising by just 57,000 and rate-hike odds falling after the data.

Evercore ISI’s Krishna Guha said Warsh sounded “relaxed” about the labour market.

2. ISM Services PMI: Week’s first economic test

Before the Fed minutes, Monday’s ISM Services PMI will set the tone.

ISM has scheduled the June services report for 10 a.m. ET on Monday, July 6, after the July 3 market holiday shifted the calendar.

The May reading rose to 54.5, showing the services side of the economy was still expanding.

A softer print would support the argument that growth is slowing enough to keep the Fed patient.

A stronger reading, especially if prices remain firm, would make the minutes feel more dangerous for rate-sensitive stocks.

3. Chip-sector aftershocks: Reset or warning sign?

Semiconductors remain the market’s most crowded trade, and that makes next week important.

The sector has been rattled by sharp swings in Korean memory names and US chip stocks.

The Kospi index surged on Friday after a two-day decline, helped by bargain-hunting in chipmakers, while US tech weakness had weighed on sentiment earlier in the week.

Samsung and SK Hynix rebounded strongly on July 3 after Thursday’s selloff, while Micron remained under pressure following a sharp drop.

The question for investors is whether this is a healthy reset after a huge AI rally, or the first sign that positioning has become too leveraged.

4. Levi Strauss and PepsiCo: Early consumer checks

Q2 earnings season does not fully accelerate until mid-July, but Levi Strauss and PepsiCo will offer early signals on the US consumer.

Levi will discuss second-quarter results on Wednesday, July 8, while PepsiCo has confirmed it will release second-quarter results on Thursday, July 9.

Levi offers an early read on discretionary spending and demand for apparel, while PepsiCo provides a staples-side check on consumer tolerance for higher snack and beverage prices.

Together, they will help show whether earnings strength is broadening beyond AI and mega-cap technology.

5. Oil and the fragile Iran ceasefire

Oil’s retreat has helped ease inflation anxiety, but the market is not treating the calm as permanent.

Brent is trading around $71.87 and WTI near $68.63, with prices close to pre-conflict levels as peace efforts held and some Strait of Hormuz traffic resumed.

That cooling helps consumers and the Fed. But it also depends on the diplomacy holding.

The oil prices have returned to pre-war levels even though shipping disruption, insurance costs and geopolitical risk have not fully disappeared.

That is why next week matters as Goldman Sachs has lifted its year-end S&P 500 target to 8,000, but valuations are already rich by long-term standards.

With stocks priced for good news, a hawkish Fed surprise, weak consumer readout or renewed chip volatility could hit harder than usual.

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US stocks see biggest exit since March: is Wall Street’s rally at risk?

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US stock funds saw their biggest weekly exit since March, raising fresh questions about the strength of Wall Street’s rally.

Investors pulled $17.2 billion from US stock funds in the week through July 1, according to Bloomberg, citing Bank of America strategists led by Michael Hartnett and EPFR Global data.

The move does not signal a market crash, but it does show investors are turning more cautious after a strong run in US equities.

The key question now is simple: is this routine profit-taking, or an early warning that confidence in the AI-led rally is starting to fade?

Wall Street’s rally loses its flow cushion

Fund flows work like a sentiment gauge as they show whether investors are adding fresh money to equity funds or quietly taking some risk off the table.

A $17.2 billion weekly exit does not mean the S&P 500 is collapsing, but it indicates that investors are becoming more cautious after a powerful run in US equities.

That matters because this rally has leaned heavily on megacap technology, AI optimism and confidence that corporate earnings can keep absorbing higher rates.

When money is still pouring in, expensive markets can keep climbing, but when flows turn patchier, valuations become more exposed to bad news.

The shift did not appear from nowhere as US equity funds already saw $3.5 billion of outflows in the week to June 24, as worries over debt-funded technology spending and hawkish Federal Reserve expectations weighed on sentiment.

Technology sector funds saw nearly $20 billion of withdrawals that week, reversing the previous week’s inflows.

That makes the latest BofA number less of a surprise and more of a continuation and a signal that investors are no longer buying every dip with the same confidence.

Tech fatigue is becoming harder to ignore

The pressure point remains technology. The AI trade has been the engine of Wall Street’s advance, but it is also where concentration risk is highest.

The MSCI World Index fell 2.07% last week amid worries over concentration risks and hyperscalers’ spending plans.

Those concerns matter because investors are watching whether cloud giants can turn massive AI capex into durable profits, not just bigger bills.

BNY’s Bob Savage told Reuters that the AI-led equity rally was showing signs of fatigue.

That is the kind of line that lands because it captures the market’s current mood: still bullish on AI in principle, but less willing to ignore every valuation warning.

Oliver Shale, investment specialist for the US at Ruffer, made the positioning risk clearer.

He said that through the lens of valuations, positioning and sentiment, risk measures are “flashing amber.”

Rotation, not full retreat

The more balanced reading is that investors are rotating, not giving up on equities altogether.

LSEG data showed global equity funds pulled in $10.4 billion in the week to July 1. Asian equity funds attracted $7 billion, their biggest inflow in seven weeks, while US funds saw a smaller $1 billion inflow.

Technology funds also rebounded with $8.9 billion in inflows after the previous week’s heavy selling.

That complicates the bearish case. Investors may be trimming crowded US exposure while still buying technology and other regional equity opportunities.

William Bratton, head of cash equity research for APAC at BNP Paribas, struck that tone in a note cited by Reuters.

He said the bank’s tech analysts saw “no reason” for the sector’s earnings momentum to slow or reverse in the near term, with the coming second-quarter earnings season expected to be supportive.

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From a dental office basement to a trillion dollars: Is Micron the next Nvidia?

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The chip that could make or break Wall Street’s confidence in artificial intelligence no longer lives inside a flashy graphics processor.

Increasingly, it sits inside a memory module, and it is made by a company that started life in a Boise, Idaho, dental office basement in 1978.

For most of its four-decade existence, Micron Technology was the kind of stock serious investors avoided.

Memory chips, dynamic random-access memory, or DRAM, and its derivatives were a commodity.

The business ran in brutal cycles: a shortage would lift prices and profits, manufacturers would race to add capacity, supply would overshoot demand, prices would collapse, and the cycle would repeat.

MU was a trade, not an investment. Wall Street treated it accordingly. That story is being rewritten at speed.

Over the past year, Micron’s shares have surged roughly 700%, with 200% of those gains arriving in 2026 alone.

Last month, the company crossed a $1 trillion market capitalisation for the first time.

Its latest quarterly earnings delivered a 346% surge in revenue and gross margins of 84.9% surpassing, remarkably, those of Nvidia.

And in a stretch when AI and technology stocks were nursing heavy losses after questions over bubble-territory valuations began circulating on Wall Street, it was Micron’s blowout results that steadied nerves and reignited confidence that the AI trade still has runway.

Two years ago, that role belonged to Nvidia.

The question investors are now asking is whether it has quietly passed the baton.

How Nvidia wrote the bellwether playbook

To understand what Micron may be becoming, it helps to understand what Nvidia became.

In November 2022, when OpenAI launched ChatGPT and set off the current AI frenzy, Nvidia’s graphics processing units, originally designed for computer games, found themselves identified as the workhorses for training AI models.

Demand exploded. Between its October 2022 low and June 2024, Nvidia’s shares surged approximately 1,100%.

By mid-2024, it had briefly become the world’s most valuable company, with a market capitalisation of $3.34 trillion, and had joined the select grouping of mega-cap technology companies known as the Magnificent Seven alongside Alphabet, Meta, and others.

But Nvidia’s significance went beyond its own price. It became a barometer.

Investors read Nvidia’s earnings reports the way they read blockbuster economic releases, not just for what they said about one company, but for what they implied about the pace and health of the entire AI buildout.

Even when Nvidia itself traded flat after reporting, its supply chain partners, Taiwan Semiconductor, SK Hynix, and ASML, would often move sharply in anticipation or in the immediate aftermath of its numbers.

“It’s not just a single stock,” Arun Sai, multi-asset portfolio manager at Pictet Asset Management, told the Financial Times last year.

“It’s very unusual for people to read through it to the economy as a whole.” That power has not vanished.

In its latest first-quarter results, Nvidia posted revenue of $81.6 billion, up 85% on the year, while net income more than tripled to $58.3 billion.

Those are not the numbers of a company in decline.

But its shares fell 1.6% in after-hours trading following the release.

The market has become accustomed to Nvidia delivering stellar figures and was pricing in something closer to perfection.

Year to date, Nvidia’s shares have risen a modest 3%.

Over the past 12 months, the gain is approximately 22%, a respectable figure for most companies, but underwhelming by the standards of what the market has come to expect.

The Nvidia era of market-moving earnings is not over; it has simply become less dramatic.

How scarcity of memory birthed the Micron of today

Micron’s rise as a new bellwether flows from a structural shift in what AI actually needs to run.

Modern AI systems require enormous amounts of data positioned directly alongside the processors crunching it.

That makes memory, specifically high-bandwidth memory, or HBM, one of the scarcest and most valuable components in an AI server.

Without enough of it, even the fastest GPU becomes a bottleneck.

As that realisation spread through 2025, Micron stopped being valued as a commodity memory producer and began being treated as a strategic supplier to the AI ecosystem.

Only three companies in the world can manufacture HBM at scale: Micron, South Korea’s Samsung, and SK Hynix.

That oligopoly, combined with the surge in AI-related demand, has produced something unfamiliar for the memory industry: sustained pricing power.

Micron’s gross margins in its latest quarter stood at 84.9%, up from 74.9% the prior period and from just 39% a year earlier.

The company expects the HBM market it serves to grow to approximately $100 billion by 2028.

Where large technology companies once faced what commentators called an “Nvidia tax”, paying a premium for indispensable chips, some now speak of a “Micron tax,” a memory toll that hyperscalers and AI infrastructure builders simply have to absorb.

Apple has been an example on that front after it had to raise the prices of its devices due to surging memory costs.

How Micron stabilised markets

The significance of Micron’s new role crystallised earlier this month.

Markets had been rattled by concerns that AI spending was outpacing any near-term revenue visibility.

SpaceX’s $25 billion bond sale, arriving so soon after its IPO, led investors to wonder if Wall Street might be entering AI bubble territory.

Ludovic Subran, chief investment officer of Germany’s Allianz, which manages €800 billion in assets, warned that markets may be shifting from “a healthy boom, a stretched boom into bubble territory.”

AI and technology stocks sold off sharply.

Then Micron reported that revenue surged 346% for the quarter.

Profit came in at $28.2 billion, almost 15 times the figure posted in the same quarter a year earlier.

The company blew past analyst expectations on every key metric, sending its stock nearly 16% higher in after-hours trading.

The results did not just lift Micron.

They stabilised the broader AI trade.

Investors took them as confirmation that the demand underpinning the entire AI infrastructure buildout, however stretched valuations may have remained real and accelerated.

A cautionary tale, and what Micron is doing about it

Nvidia’s trajectory does, however, offer a warning.

Its dominant position in AI chips, once a near-monopoly, is under pressure.

OpenAI has unveiled a custom AI chip developed with Broadcom.

Qualcomm has struck supply deals with Microsoft and Meta.

Competition is arriving from several directions simultaneously.

Micron’s shareholders would do well to hold that lesson in mind.

The more immediate risk is the one built into memory’s DNA.

Micron’s latest revenue surge was driven substantially by dramatically higher prices, margins of 85% compared to 38% a year ago, telling that story plainly.

Nvidia’s 85% revenue growth, by contrast, is not similarly dependent on elevated pricing.

As analyst David Jagielski of The Motley Fool has noted, if demand were to slow or if memory supply were to catch up with demand, Micron’s valuation, which has risen sharply over the past year, would face a steep correction.

Micron’s management is aware of the history and is attempting to break it.

The company is pursuing long-term supply contracts that lock customers in and reduce exposure to spot-market pricing swings.

CEO Sanjay Mehrotra has argued that the supply crunch is structurally different this time, as new semiconductor fabrication plants take years to build, and next-generation memory has become significantly more complex to manufacture, meaning capacity cannot be added quickly enough to produce the oversupply gluts of previous cycles.

To back that argument, Micron is investing approximately $200 billion in manufacturing and research and development, including new memory fabrication plants in Boise, Idaho, and Syracuse, New York.

Whether Micron can hold Nvidia’s former position as Wall Street’s preferred instrument for reading the AI boom will depend on whether those structural arguments prove correct.

For now, the market has decided that the most important number in AI is not measured in teraflops. It is measured in gigabytes.

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Americans’ revolt against data centers is growing: how it could disrupt the AI trade

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The artificial intelligence boom has a people problem, and it is getting worse faster than most investors have noticed.

While Wall Street has spent the better part of three years fixating on chip stocks, hyperscaler spending, and the relentless march of AI valuations, a less glamorous drama has been unfolding in suburban town halls, county commission meetings, and online petitions from New Jersey to Michigan.

Ordinary Americans, armed with electricity bills, noise complaints, and a generalised anxiety about what artificial intelligence is doing to their lives, are pushing back against the physical infrastructure of the AI boom — and they are beginning to win.

In the first quarter of 2026, 75 data-centre projects worth a combined $130 billion were blocked or delayed by local opposition, according to Data Center Watch, a research firm backed by AI security company 10a Labs.

That is as many projects as faced that fate across the entirety of 2025.

The pace of resistance is accelerating precisely as the pace of construction is accelerating, creating a collision that the industry has been slow to take seriously.

Why communities are saying no

The grievances are varied, but they cluster around a handful of recurring concerns.

Power consumption sits at the top. Between 2018 and 2023, the share of total US electricity consumption represented by data centres rose from 1.9% to 4.4%, according to a study published in the journal Environmental Research Letters.

Projections for what comes next are stark: by the end of the decade, national average wholesale electricity costs could rise between 6% and 29%, with the increase driven primarily by data-centre expansion.

In Virginia, one of the epicentres of the country’s data-centre boom, electricity generation costs could spike by as much as 57%.

Water usage is a second flashpoint.

Data centres use enormous volumes of water for cooling, and in communities already managing drought risk or ageing infrastructure, the addition of a facility consuming millions of gallons annually is not an abstraction.

Residents have also cited the constant low-frequency hum emitted by large facilities, which critics argue could fundamentally alter the character of surrounding neighbourhoods and pose health concerns with prolonged exposure.

Then there is something harder to quantify but no less real.

A general psychological resistance to artificial intelligence has fused with the more concrete grievances, giving the movement an ideological dimension that purely economic arguments cannot easily address.

About 44% of Americans now oppose data-centre construction in the United States, against just 21% who support it, according to a Reuters/Ipsos poll conducted in June.

The gap widens sharply when the question becomes personal: asked whether they would support a data centre in their own community, 57% said no, while only 14% said yes.

“Something that has changed right now is that now we have people that are against data centres even though they don’t have a data centre in their backyard, because they see data centres as the embodiment of AI,” Miquel Vila, lead analyst at Data Center Watch, told Fortune.

“What they oppose is AI. They consider that stopping data centres is the way to stop AI development.”

Why Wall Street is beginning to pay attention to the protests

To appreciate why the financial stakes are significant, it helps to understand how thoroughly the data-centre buildout has underpinned the broader economy and equity markets.

Morgan Stanley estimates that hyperscalers like Microsoft, Amazon, Alphabet, and others will spend $800 billion on capital expenditures in 2026 — roughly the same amount that all non-technology S&P 500 companies combined spent on capex in 2025.

The Semiconductor Industry Association projects that government and industry will spend a further $4 trillion on data-centre infrastructure through 2028.

Data-centre construction spending has already topped $50 billion in a single month, surpassing total US public spending on transportation infrastructure including airports and subways, as Bloomberg reported.

AI enthusiasm has been almost entirely responsible for the S&P 500’s 84% rise since ChatGPT’s public launch in November 2022.

Goldman Sachs expects the AI investment theme to account for roughly half of all earnings growth over the next two years.

The lofty valuations of companies across the AI supply chain rest, to a significant degree, on the assumption that planned capacity will materialise.

A large portion of it may not.

“A lot of the commitments and the build-out of data centers where it’s easy has kind of been done, so you’re getting marginally more difficult,” said Todd Castagno, a managing director at Morgan Stanley in a New York Times report.

“From a markets perspective, expectations might be, maybe not reset, but realigned with the fact that it’s hard to put a couple trillion dollars in the ground in a short time.”

Cities including Tulsa, New Orleans, Birmingham and Ypsilanti Township in Michigan have implemented temporary bans on permitting or construction, as have dozens of other counties and towns, according to a database maintained by hedge fund Interconnected Capital.

Democrats and Republicans in 14 states have proposed construction pauses.

Maine’s legislature passed a temporary statewide moratorium in April, though it was subsequently vetoed by Governor Janet Mills.

Why the tech industry’s charm offensive may not be enough

The technology industry has responded with a concerted public relations effort.

Late last year, Meta spent more than $6 million on an advertising campaign across eight states and Washington DC, promoting the economic benefits of data centres to local communities.

OpenAI and Microsoft have publicly pledged to absorb the energy costs their facilities generate, a gesture aimed at defusing consumer anxiety about rising electricity bills.

Nvidia, Amazon, and Google have each announced technological advances they claim will significantly reduce data-centre water consumption.

Whether any of this is sufficient is genuinely unclear.

“The AI boom is fast approaching a moment of truth, as rapid growth and soaring valuations collide with ballooning capital expenditure, a public backlash and the challenges of real-life adoption,” Deutsche Bank analyst Cox wrote in a recent report.

The resistance, as Vila and others have noted, is no longer purely local.

It has taken on the character of a broader social movement, and social movements are not easily neutralised by folksy advertising.

Analysts debate magnitude of risk to AI-related stocks

For investors, the distribution of risk matters as much as its existence.

“Data-centre opposition is more of an emerging risk than an immediate pressure on AI-related stocks,” Gil Luria, head of technology research at DA Davidson, said in a Barron’s report.

The largest hyperscalers — Microsoft, Google, Amazon — have global footprints and enough redundancy to route investment around hostile localities. They are inconvenienced, not threatened.

The same cannot be said for smaller operators dependent on a handful of large projects.

“The smaller AI clouds are small enough, and have projects that are big enough, that losing a few projects is material,” Luria says.

CoreWeave, for instance, is facing organised resistance to a proposed facility in Kenilworth, New Jersey, that would draw 250 megawatts of electrical capacity — roughly a quarter of the company’s active capacity today.

An online petition calling for the project’s cancellation has gathered more than 11,000 signatures.

Logan Purk, a technology industry analyst at Edward Jones, believes that already extended construction timelines will lengthen further, ultimately reducing the total amount of capacity built.

The ripple effects would travel up the supply chain. “I do think the difficulty is not fully baked in,” Purk said in a New York Times report.

“If we assume tomorrow that data-centre construction stops because there’s no access to new power, the ripple effects across the semiconductor industry would be pretty substantial.”

The picks-and-shovels companies — the equipment and infrastructure suppliers whose fortunes are pegged to the volume of construction — are the most directly exposed.

The resistance might also create some winners

The backlash, however, is not without its beneficiaries.

Mark Guberti of The Motley Fool argues that operators who already have data centres built and generating revenue are quietly positioned to benefit.

“The presence of fewer data centers helps these companies charge higher prices for their AI infrastructure,” he says.

Among the names he points to are Iren and Terawulf, both of which have operational sites and a revenue base that a construction freeze would only make more valuable.

Edge data centres represent a separate category of potential winner.

“These types of data centers are much smaller than large-scale AI data centers that eat up multiple gigawatts of energy,” Guberti says.

“Protesters are less likely to rally against these types of data centers, and zoning requirements for them are less complex.”

These facilities consume far less power and water, present a significantly smaller target for organised opposition, and are considerably less likely to trigger the kind of community mobilisation that is stalling larger projects.

One Stop Solutions, which designs the hardware that forms the backbone of edge data-centre sites, is among the companies analysts have identified as a direct beneficiary of that shift.

Honeywell offers exposure to the same theme through its building automation division.

The business grew 8% year over year in the fourth quarter and accounted for roughly a fifth of the company’s total sales.

However, Honeywell is diversified across multiple industrial businesses, making it a less concentrated play on the edge data-centre theme than One Stop Solutions, which carries more risk but offers purer exposure for investors seeking growth.

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