Nasdaq futures slipped in early trading as investors grew cautious about the pace of the AI infrastructure buildout. Chip and AI infrastructure stocks remained under pressure after UBS, the investment bank, warned that growing local opposition to new data centers could put roughly 30% of expected 2028 capacity additions at risk.
The anxiety isn’t really about one bad quarter; it’s about whether the AI buildout keeps expanding as fast as investors have penciled in. Reuters reported growing local opposition to new data centers in several key US markets, and UBS said those “pauses” could slow construction into 2028 – a problem for companies that sell the chips, servers, networking gear, and power equipment that fill those facilities.
Why data center delays hit suppliers hardest
Data center spending is lumpy: projects come in waves, so a delay often shows up first as order timing (backlogs stretch out), and then as profit pressure if factories and teams are left with the same fixed costs but fewer shipments. That’s why the selloff has been sharper in suppliers like Nvidia, Marvell, Intel, Dell, Hewlett Packard Enterprise, GE Vernova, and Constellation Energy than in mega-cap platforms like Amazon, Meta, and Alphabet, which UBS and Reuters noted can sometimes benefit if capacity grows a bit more slowly and becomes easier to source.
For everyday investors, this is a reminder that the AI trade isn’t a single bet. The companies that build the physical infrastructure – the chips, the servers, the cooling systems, the power gear – are more sensitive to delays than the cloud giants that ultimately buy that equipment. When a project slips, suppliers feel it first, often through lower factory utilization and weaker margins, even if the orders eventually come back.
Local opposition to data centers has been growing in several US markets, with residents and local governments raising concerns about noise, water use, and strain on power grids. Some communities have pushed back on zoning approvals, and in some cases, companies have had to adjust plans or find new sites. This isn’t a new dynamic, but it’s becoming more visible as the scale of planned data center construction grows.
What it means for investors
When analysts value chip and hardware firms, a lot of the story rests on incremental data center volumes years out. If permitting or community opposition pushes projects back, suppliers’ expected revenue can shift from “lost” to “later” – but markets often reprice first, because delayed orders can still dent near-term earnings through lower factory utilization and weaker margins. The biggest cloud buyers may look steadier in that scenario, but their supply chains usually take the volatility.
For investors, the key takeaway is that the AI buildout is not a straight line. Even if the long-term demand for AI computing remains strong, the path to that demand is full of potential speed bumps – and those bumps can cause sharp moves in the stocks of companies that are most exposed to the timing of construction.
UBS’s warning is a specific example of a broader risk: the AI trade is priced for rapid, uninterrupted growth. Any sign that growth could slow – even temporarily – can trigger a repricing, especially in the higher-beta names. That doesn’t mean the AI story is over, but it does mean that investors should be prepared for volatility.
For those watching the space, the next few quarters will likely show whether these delays are temporary hiccups or a more lasting slowdown. If projects are merely postponed, suppliers could see a rebound in orders later. But if opposition becomes more entrenched, the risk to 2028 capacity could become a reality, and the market may need to adjust its expectations further.
In the meantime, the divergence between suppliers and cloud platforms is worth noting. While suppliers face the brunt of the selling, the mega-cap platforms that buy the capacity may actually benefit from a slower buildout – because it could ease the competition for scarce resources like power and land, and make it easier to source capacity when they need it.
For now, the market is focused on the near-term impact. As UBS’s warning suggests, the risk is not just about 2028 – it’s about how the market prices that risk today. Investors should keep an eye on any further news about data center permitting and local opposition, as well as any updates from the companies most exposed to the buildout.
