Investing.com — Goldman Sachs told clients in a new note that Democrats’ larger-than-expected wins in the midterm elections could have significant implications for AI and data center regulation, particularly at the state and local level.
Goldman’s Jenny Grimberg said the bank expects Democrats to use their new majorities in Congress to push for policy concessions around upcoming fiscal deadlines.
“With Democrats winning much larger-than-expected majorities across the House and Senate, we expect them to leverage upcoming fiscal deadlines to seek policy concessions, specifically to limit the Iran war, roll back select tariffs, and reverse recently-enacted spending cuts,” she wrote.
Goldman also expects Democratic wins in state and local races to bring tighter AI and data center rules. Its equity analysts see this weighing on some U.S. utilities and independent power producers, which sell electricity to data centers.
However, the bank expects the issue to become less important over time.
“We expect the data center issue to somewhat fade in importance ahead and any moratoria on data center development to be short-lived,” Grimberg said.
The bank noted that the oil risk premium has fallen significantly since the election. Still, it recently raised its average 2027 Brent forecast to $88 a barrel from $80, citing downside risks to Middle East supply. As a result, Goldman now expects weaker growth and higher inflation in Europe next year.
The bank expects S&P 500 earnings growth to slow from nearly 30% this year to 18% in 2027.
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