GoKawiilCNBC's Jim Cramer said Monday the data center trade isn't dead, but its next wave of winners could look very different.
"The data center thesis, perhaps the greatest investment theme in a generation, is now under attack and it may never be the same," the "Mad Money" host said.
Data center stocks have come under pressure as politicians and local communities push back against projects over electricity costs, water use and other concerns. Cramer pointed to Pennsylvania and Texas, where governors who previously supported data center development have recently called for stricter requirements.
"We know that rules can be crafted and communities can be appeased, but the unbridled buildout is most likely over," Cramer said.
With the pace of development now less certain, Cramer said investors may be unwilling to pay premium valuations for data center beneficiaries such as gas turbine maker GE Vernova and memory companies Micron , Sandisk , Western Digital and Seagate , even if underlying demand remains strong.
But the changing landscape could benefit Amazon , Alphabet , Microsoft and Meta , he noted. Cramer said the hyperscalers have the financial resources to meet tougher regulatory and community requirements that smaller, speculative data-center developers may struggle to afford.
"They're the biggest beneficiaries, because they can afford to compensate local communities and get their warehouses full of servers built," Cramer said.
Fewer speculative developers could also reduce competition for land, labor and electricity, potentially lowering costs for hyperscalers as they continue building AI infrastructure.
For Cramer, the political backlash doesn't mean abandoning the data center trade. Instead, it could shift the advantage toward the largest technology companies capable of continuing to build despite tougher restrictions.
"They're the winners," Cramer said. "I think they'll keep winning, as they've been the losers when people extrapolate the costs of building these data centers. This political pushback is a godsend for the hyperscalers."
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