A few updates post SPCX / hyperscale earnings and thoughts regarding the increasing regulatory pressure on AI data center buildouts as we head into midterms. The increased regulatory news flow increases the value of existing compute and permitted power; thus, we continue to see upside to highlighted names; SPCX, ORCL, CRWV, NBIS and recently added FRMI.
Regulatory environment for data centers: AI data centers, moratoriums and rate-payer protection are starting to become the leading topic for candidates on both the right and the left. This week we will watch an important Democratic primary in Wisconsin where the top candidate Hong has a “Control-Alt-Delete” campaign against data centers. TX Governor Abbott has asked for a full review of the data center queue at ERCOT which is being read as a signal to slower approvals moving forward. Lastly, in Ohio, both candidates (R and D) have either moratorium level or regulatory level views on data centers. Vivek Ramaswamy has even proposed that electricity should be “free” for anyone living in a town where a data center is built. This seems pretty hard to see implemented but the reality is that AI and data centers are rapidly a focal point. Below is a basic sentiment-rank of the top 10 states where data center moratoriums are front and center with implications, as well as prediction market values to see the general direction currently anticipated for the elections. At this point— increased regulation and higher costs for the builders are on the table, and moratoriums remain edge/extreme cases.
Source: 22V Research; Polymarket / Kalshi, as of 8/9/26.
SpaceX completed its first public company earnings report and the first shares of pre-IPO holders were unlocked. The shares bottomed around $110 and closed about $1.00 below the IPO price (a 20+% rally). In our note (link) we indicated a positive view of the quarter, with $100B exit 2026 revenue guidance and what appears to be a growth target that could take 2028 revenue north of $200B based on a tight compute market and the company’s aspirations to have 8+GW of compute online by the end of 2027.
The Cursor acquisition closing is imminent as per Bloomberg on Friday—a positive catalyst both from the standpoint of being a contributor to Q3 revenue but also as the market will get a look at the run rate of this business, which appears to be doing well given the Q2 exit ARR guidance.
As it relates to tight compute markets, we have had a favorable view on neoclouds and data center operators like CRWV, ORCL, NBIS, but we also have come to appreciate the increased importance and value of access to sizable amounts of power (whether permits or generation capacity). SPCX is clearly looking for a significant tranche of this for 2027, and we highlighted FRMI (link) as another beneficiary of this theme, where a slower regulatory process increases the value of grandfathered permits and positions. FRMI’s overlap with SPCX’s position is of particular interest, as noted in the chart below.
Source: 22V Research, FRMI corporate presentation, SPCX Q2 earnings
Hyperscale earnings have wrapped up and below is the updated consensus capex build-up for the group. 2027 consensus moved up 15.2%, led by GOOG, AMZN and SPCX. 2027 and 2028 total capex is north of $1.26T and $1.4T respectively. This leads to a y/y increase of 44.8% in 2027 and 19.1% in 2028 at current estimate.
Source: 22V Research; Bloomberg
The most significant increases in consensus capex in the past 30 days.
Source: 22V Research; Bloomberg
Week ahead: Earnings for CRWV, NBIS and FRMI. Notable areas to focus on:
- Open-source debate.
- Competitive dynamics for the neo-clouds.
- Debt-market commentary for scaling.
- Build-out progress—GW added in the quarter.
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