ABOUT THIS EPISODE
A midterm election that put data centers on the ballot, followed by one of the sharpest two-day market swings in recent memory, changed the AI conversation this week, even as earnings from AMD, Arm, Lattice, and Coherent pointed to demand that hasn't slowed. Patrick Moorhead and Daniel Newman unpack what the election results could mean for the AI buildout, why the market reacted the way it did, and what the week's earnings actually showed.
The handpicked topics for this week are:
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Data Centers Land on the Ballot: Patrick Moorhead walked through the results as reported: Democrats flipped seven Senate seats for a 54 to 44 majority and won the House 259 to 176, and economic concerns topped exit polls. In Texas, which Moorhead noted has the largest planned data center buildout of any state, Gina Hinojosa defeated Greg Abbott after campaigning on a data center moratorium and an end to developer subsidies. Gubernatorial winners in Ohio and Georgia also backed pauses. Voters in 10 states weighed 41 local data center measures, and every one with reported results went against development except in Harwood, North Dakota. Daniel Newman noted that Abbott had already put a moratorium in place months earlier and read the vote mainly as a referendum on affordability, taxes, and schools. (The Decode)
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From Euphoria to Despair in Two Days: The hosts traced the selloff to concerns about neocloud financing, Elon Musk's prediction of "guppy-level death" for 200-plus AI firms, and a slowdown in Google's search business despite 100% growth in its data center business. Microsoft and Amazon jumped more than 6% Wednesday as investors bet on hyperscalers over neoclouds, then Thursday wiped out chip names: Moorhead cited NVIDIA down 7.5%, and CoreWeave down 12%, and Newman noted Micron down close to 20%. Newman argued the market is pricing AI as if the buildout will stop, a reading he called wrong. (The Decode)
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Where the Data Centers Go Next: Newman expects every project slated for 2027 and 2028 to move forward, with tougher community terms and fewer tax breaks for 2029 and beyond, and with states like West Virginia, Idaho, and Oklahoma eager to compete. He shared research estimates of $3.1 trillion in 2027 capex and $4 trillion in 2028, with a gridlock downside near $2.8 trillion. Moorhead pointed to federal land, Eastern Europe, Malaysia, the UAE, Saudi Arabia, and even space as alternatives if U.S. states pull back, warning the country could give up tax revenue and construction jobs. (The Decode)
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Export Controls and AI Guardrails: Moorhead expects a Democratic Congress to push for tighter controls on advanced semiconductors and AI, along with public AI hearings, guardrail legislation, and scrutiny of SpaceX and Tesla federal contracts. Both hosts expect plenty of gridlock and believe any changes will arrive more slowly than the market fears. (The Decode)
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AMD ($AMD) Becomes a Data Center Company: Newman highlighted 97% growth and a guide toward $17 billion next quarter, driven by Instinct GPUs and EPYC CPUs, including the CPUs powering Meta's Muse agents. Moorhead noted data center now accounts for 64% of revenue, with Q4 likely the first quarter data center AI clearly outsells server CPUs. Lisa Su said wafers, substrates, and memory are secured, yet demand still tops supply. (Bulls and Bears)
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Apple ($AAPL) Posts a Record but Faces Memory Costs: Moorhead said Apple printed a record September quarter, with memory costs set to show up in the holiday outlook and supply capping holiday upside. Newman framed Apple as a flight-to-safety play built on low capex, wide distribution, and strong product margins. (Bulls and Bears)
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Qualcomm ($QCOM) Diversifies Beyond Handsets: Newman called it a reset year as the Apple arrangement unwinds, offset by triple-digit automotive growth and data center deals. Moorhead highlighted a reaffirmed $5 billion data center target for FY27, with $650 million pegged for next quarter and a $7 billion-plus exit, along with a new SpaceX Starlink partnership for radio and baseband infrastructure and a high-bandwidth compute architecture positioned as an alternative to HBM. (Bulls and Bears)
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Arm ($ARM) Rides Data Center Royalties: Arm grew 27%, with licensing up 50% and royalties up 8%. Moorhead noted data center royalties doubled as accelerator head nodes move off x86, while commitments for Arm's own AGI CPU doubled from $1 billion to $2 billion ahead of first deliveries in Q4 2027. (Bulls and Bears)
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Lattice ($LSCC) Grows Well Beyond the Acquisition: Moorhead said revenue more than doubled, mostly organically, with FPGA revenue up 89%, industrial and embedded up 70%, and margins beating guidance by two points. Lattice and AMI are positioning to become the control plane for AI racks across any accelerator. (Bulls and Bears)
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Coherent ($COHR) Proves Its Optical Scale: Moorhead pointed to a $20 billion, five-year PhotonLink agreement, NVIDIA's $2 billion investment in March, gross margin up 184 basis points with a raised 45% long-term target, and indium phosphide output that doubled year over year. Newman argued the pending Marvell and Lumentum deal makes Coherent even more strategic as co-packaged optics demand grows. (Bulls and Bears)
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Source Links:
LINKS The Decode
Midterm Results
https://abcnews.com/Elections/2026-us-senate-election-results-live-map
https://www.texastribune.org/2026/11/04/texas-blue-wave-voter-turnout/
Data Center Ballot Measures
https://www.cnbc.com/2026/11/04/data-center-ballot-measures-2026-midterm.html
Neoclouds and the AI Selloff
https://www.investors.com/news/technology/coreweave-nebius-slide-as-blue-wave-clouds-ai-boom/
https://finance.yahoo.com/technology/ai/articles/elon-musk-predicts-guppy-level-104500941.html
AI Guardrails and Congress
Bulls and Bears
AMD ($AMD)
Apple ($AAPL)
https://www.apple.com/newsroom/2026/11/apple-reports-fourth-quarter-results/
Qualcomm ($QCOM)
https://finance.yahoo.com/markets/stocks/articles/qualcomm-inc-qcom-q4-2026-051630325.html
Arm ($ARM)
https://newsroom.arm.com/news/arm-q2-fye27-results
Lattice ($LSCC)
Coherent ($COHR)
