Democratic Party 2026 Midterm Win Will Hurt ‘Pace of the AI Revolution’: Dan Ives on ‘Blue Tidal Wave’

Dan Ives says the Democratic midterm sweep will slow the AI buildout, but the Yorkville Ives analyst’s AI thesis and tech winner list are unchanged.

Yorkville Ives analyst Dan Ives doesn’t want to downplay the impact the Democratic Party’s win in the 2026 midterms could have on the artificial intelligence sector and buildout of data centers. Here’s what Ives said the morning after the election.

Dan Ives on "Blue Tidal Wave"

Ives says the Democratic Party’s wins in the House of Representatives and the Senate are a "big hurdle for AI buildout," which will impact the AI trade.

"The Democratic blue tidal wave across the Senate and House was a seismic shift that will have a negative impact on the pace of the AI Revolution buildout in the US over the next few years," Ives said in a new investor note.

Ives said the election result will "slow the pace" of data centers being built out, which will slow down the AI Revolution.

"There is no way to sugarcoat that Democrats taking control especially over the Senate will create some major hurdles for AI and tech legislation in the Beltway over the next two years."

With President Donald Trump threatening to veto potential laws brought forth by the Democratic Party, Ives says big tech CEOs will be forced to come to the "negotiating table" and come up with compromises with Congress for AI-related legislation.

Ives said that Texas could be among the biggest worries for tech investors with Democrat Gina Hinojosa winning the governor’s race in an upset over incumbent Greg Abbott. The analyst says Hinojosa is a "known anti-data center politician."

"Worries around the future of the data center buildout in Texas a real issue for tech investors."

The analyst highlights Space Exploration Technologies Corp. (NASDAQ:SPCX), or SpaceX, as a stock that will be under pressure from the election result.

Ives said the election results and a slowdown in U.S. AI growth could help China narrow America’s lead, or even move ahead.

Ives Still Bullish on Tech

While AI growth may slow, Ives is not ready to throw in the towel on the sector yet.

"It does not change the overall thesis and monetization theme of the AI Revolution," Ives said.

Even if fewer data centers get built, Ives said the Street is "way underestimating" future revenue growth from AI.

"Now it will happen at a more measured pace which is likely a good thing in the eyes of many investors…and the market will digest this news and move forward."

Ives said his "tech winner list" is unchanged.

The analyst recently shared what he believes are the best AI stocks across several sub-sectors.

Chips: Nvidia Corp. (NASDAQ:NVDA)
Hyperscalers: Microsoft Corp. (NASDAQ:MSFT)
Software: Palantir Technologies Inc. (NASDAQ:PLTR)
Cybersecurity: CrowdStrike Holdings Inc. (NASDAQ:CRWD)
Consumer Internet: Apple Inc. (NASDAQ:AAPL)
Physical AI: Tesla Inc. (NASDAQ:TSLA)

“Each sits where demand is contracted, funded, and accelerating, and together they give investors exposure to the AI buildout into 2027 without having to pick the winner of the application-layer shakeout,” Ives recently said.

Photo: Shutterstock