Oracle most exposed to Texas data center pause, but a buy

Texas Governor Greg Abbott began auditing data center requests in August and in September ordered the Texas Commission on Environmental Quality to halt final permits, pausing new development until at least December. Gina Hinojosa's upset victory in the 2026 gubernatorial election suggests public sentiment around data centers has turned more negative, which is the backdrop for the focus on Oracle.

Oracle's Texas footprint is extensive: it chose areas around Abilene for its largest deployments because of the region's wind and solar capacity, and it has capacity in the Dallas-Fort Worth area, one of the world's most interconnected data center corridors. Austin remains its operational base for now even as the company plans to relocate its headquarters to Nashville over the next few years.

The counterargument to the bear case rests on two points: the moratorium would not touch current facilities or those under construction, and it would presumably last only until new regulations are in place. Oracle's fiscal Q1 2027 results — $19 billion in revenue, up 30%, and nearly $4.8 billion in net income, up 63% — are presented as evidence that its debt load is manageable, while its legacy businesses outside the cloud provide stability that a cloud-only company like CoreWeave lacks. With the stock near 52-week lows and a 20 P/E close to its lowest since the pandemic, Oracle investors probably do not need to worry about Texas's political shift.