Nvidia's Stock Looks Resilient Amid Data Center Backlash

Data centers have become a contentious issue in the US midterm elections, with politicians facing backlash for supporting their construction. The backlash is expected to result in delays and cancellations of data center projects across the country.

Nvidia, which relies heavily on data center spending, has expressed concern about the potential impact on its revenue growth. However, the company's financials suggest that it may be better equipped to weather this storm than initially thought.

Nvidia's 10-Q filing states that 'the availability of data centers, energy, and capital to support the buildout of NVIDIA AI infrastructure by our customers and partners is crucial' for its revenue growth. However, when discussing potential delays in data center construction, Nvidia makes a distinction: it says that customers may delay adopting new architectures if their data center infrastructure is not ready, which could affect the timing of revenue.

Nvidia's numbers say it all - the company has $500 billion in AI chip bookings for 2025 and 2026 combined, with CEO Jensen Huang stating that Nvidia has a backlog of at least $1 trillion through 2027. This means that even if some data center projects are delayed or cancelled, Nvidia would likely have enough wiggle room to shift its sales to backlogged projects.