With primary season drawing to a close, the midterm elections are heating up in earnest. And one big issue has emerged as a flashpoint in races for government offices across the country: data centers.
According to reporting from Politico, politicians such as Pennsylvania Gov. Josh Shapiro, Texas Gov. Greg Abbott, and Ohio Sen. Jon Husted are finding themselves in hot water over their past support for bringing data centers to their states. Their opponents see this as an opportunity to hammer them for an unpopular stance.
Meanwhile, communities across the country have been successfully pressuring local lawmakers and zoning boards to outlaw future data centers and even revoke data center permits that have already been approved. The backlash is expected to result in big headaches for developers and big delays in the nationwide data center build-out.
Will these delays and cancellations cause problems for Nvidia (NVDA +2.19%), the biggest beneficiary of data center spending? Could the backlash get so big that it will torpedo Nvidia's stock price? Here's what investors need to know.
Image source: Nvidia.
Data centers are crucial to Nvidia's revenue growth
In its most recent 10-Q filing, Nvidia admits, "The availability of data centers, energy, and capital to support the buildout of NVIDIA AI infrastructure by our customers and partners is crucial, and any shortage of these and other necessary resources could impact our future revenue and financial performance." That doesn't sound too promising.
But Nvidia makes a crucial distinction in its 10-Q. When discussing the risk presented by delays in data center construction, it says, "Customers may delay adopting new architectures if their data center infrastructure is not ready, which could affect the timing of our revenue [emphasis mine]."
Nvidia isn't saying that the amount of revenue it makes would be affected, only the timing of said revenue. And there's a big reason Nvidia isn't worried about whether that revenue will come in.
Image source: Nvidia.
Demand for Nvidia's chips is far outstripping supply
Nvidia's numbers say it all.
The company had $500 billion in AI chip bookings for 2025 and 2026 combined. Nvidia CFO Colette Kress confirmed that the number is even higher now that full-year orders for Nvidia's latest Rubin chips have arrived.
Meanwhile, CEO Jensen Huang has stated that Nvidia has a backlog of at least $1 trillion through 2027. With that kind of demand, Nvidia would likely have enough wiggle room to weather dozens or even hundreds of delayed data center projects, simply shifting its sales to backlogged projects that haven't been affected.
NASDAQ: NVDA
Key Data Points
Of course, any data center seeking a building permit now wouldn't be able to begin its operations for years, even if the permit were approved. It would need to be sited, built, connected to utilities, and inspected before procuring any Nvidia chips or server infrastructure. That gives Nvidia extra insulation from the current political backlash.
In short, Nvidia investors shouldn't be worried about the data center backlash. Nvidia looks ready to weather the current political storm just fine.
