Powered Shell Providers: North America: Midterm Implications for the 「Time to Power」 Stocks

Morgan Stanley provides midterm thoughts on the time to power stocks — Powered Shell Providers and Behind the Meter power generation players — following the midterm election results. By far the most important result from the perspective of data center development was the Texas gubernatorial election: Democrat Gina Hinojosa's victory could bring greater policy uncertainty and constraint on future supply, increasing the relative value and pricing power of existing, power-secured facilities. Texas had paused portions of its data center interconnection process after Gov. Greg Abbott ordered an audit; requests reached approximately 474 GW, more than 5x ERCOT's record peak demand, with data centers roughly 90% of new power requests. In Ohio, Democrat Amy Acton's win creates significant risk of delays, the largest being the 10 GW project involving NVIDIA. Continuing pushback reinforces concern of insufficient US data center capacity by 2028.