The market has rendered its provisional judgment on the midterm elections, seeing threats to the AI datacenter complex and Elon Musk. Here are the winners and losers of the big blue wave.

Losers

Elon Musk’s companies

Tesla shares fell over 3% on Wednesday while SpaceX shares fell 3.8%.

Before the election, several Congressional Democrats who will now be serving in the majority made it clear that their oversight powers across a number of domains would be turned on the Trump-supporting sometimes-trillionaire.

“We think the market fears Democrats will look to target Tesla, as Tesla CEO Elon Musk heavily campaigned for the Republican Party leading up to the election,” Morningstar analyst Seth Goldstein wrote in a note to clients.

AI-related companies

But of course Elon Musk isn’t just a Trump-connected electric car and battery chief executive, he also runs an artificial intelligence model developer and “neocloud” (i.e. a builder and renter out of data centers for artificial intelligence) by the name of SpaceX (it also launches rockets).

Several other companies who rent out compute to AI developers saw their shares decline, including CoreWeave (down 10%) and Nebius (down over 6.5%), as Democrats who criticized data center developers won up and down the ballot, including at the state level in data-center-heavy states like Georgia, Texas, and Ohio.

The results imply “incrementally negative AI sentiment on greater expectations for data center restrictions,” Morgan Stanley equity strategists wrote in a note to clients.

“Any investors adding 10 or more GW of compute to SpaceX's SI business in 2027 may want to revise down. State pushback on terrestrial/atmospheric datacenters has a head of steam,” Morgan Stanley analyst Adam Jonas wrote in a note to clients.

Semiconductor companies Nvidia and Broadcom were also down around 3% and 2% respectively.

Firm power companies (including clean ones)

Of course those data centers are largely consumers of power, so as the data center industry got sick, the power industry caught a cold.

Companies that own fossil fuel and nuclear power plants were hit hard today. Shares of Vistra (which has a 44,000-megawatt power plant portfolio) were down almost 14%, Constellation (which owns and operates 21 nuclear reactors) was down 6% and Talen (which owns 14 power plants largely in the PJM region) fell 8.5%. GE Vernova, which has been riding the AI boom by selling gas turbines to power plant developers, was down over 9%.

“Laggards include anything that touches data centers,” Jefferies analyst Julien Dumoulin-Smith wrote in a note to clients. “Expect a difficult unwind day given the scale of the upset in the single biggest state for data center activity,” he wrote, referring to Texas.

And Fervo, the enhanced geothermal developer, really is being treated like a "normal" energy company: its shares were down 4.5%. X-Energy, the advanced nuclear developer, was also down almost 8.5%.

Utilities, especially one specific utility

The vertically integrated utility Southern Company was essentially on the ballot by way of its subsidiary Georgia Power in the Georgia Public Service Commission race and lost. Georgia Power represents about 60% of Southern’s earnings. “Southern Company remains the clearest commission-control risk after Democrats sweep Georgia’s two PSC seats,” Dumoulin Smith wrote.

Across the whole sector, newly elected governors and public utility commissioners could put pressure on the return on equity that utilities are allowed to earn on their investments.

“ROEs are one of the only things utility regulators have to reduce rates,” Rains told me.

Winners

Clean Energy

In the energy sector, the big winners were renewables. The S&P Global Clean Energy Transition Index was up over 3% today, while the Danish wind manufacturer Vestas was up almost 3%, while shares in Orsted, the Danish wind developer, were up around 5%. Domestic solar First Solar was up 5% while Sunrun, the solar installer, was up almost 1.5%.

“The blue wave improves the federal outlook for renewables, with Democratic leaders pledging to restore wind and solar tax credits if they regain congressional control,” Dumoulin-Smith wrote.

But the Democratic victory does not necessarily mean the end of the war on offshore wind, although it puts the industry’s defenders in a stronger position.

“While a positive development, we believe it is premature to call a renaissance in US offshore wind,” Morningstar analyst Tancrede Fulop wrote in a note to clients.

EV makers not named Tesla

Shares in Rivian were up almost 6%, while Lucid shares were up almost 12%, indicating bullishness for the larger EV sector as Democrats may be able to push for a return to subsidies for electric vehicles or harsher mileage standards while also putting pressure on Elon Musk personally.

The stock market as a whole

The market is up over 1.5%, likely thanks to oil prices dropping.