Costco shines as AI names slide post-midterms

The 2026 midterm elections handed Democrats control of both chambers of Congress, a shift that immediately reshaped market expectations. Southern states like Florida and Texas had spent two decades attracting corporate migration with less regulation and lower taxes, but companies that relocated may now face a landscape focused on energy and building constraints and tighter legislative oversight.

Information technology, semiconductors, and traditional energy sectors experienced immediate headwinds. Senator Bernie Sanders reposted his efforts to advance a data center moratorium proposal he co-authored with New York Congresswoman Alexandria Ocasio-Cortez, and over half of the U.S. hyperscale data center pipeline could now face heightened regulatory friction. Developers may face tax increases, strict "bring your own power" mandates, or new air-permit delays for on-site gas plants, and as all-in construction costs rise, immediate demand for advanced chips snowballs down the hardware supply chain.

The political shift also reshaped energy and defense expectations. With Democrats controlling Congress, President Trump faces a legislative body that can constrain his military options, and Secretary of State Marco Rubio has indicated a negotiated deal with Tehran is preferable to escalating kinetic options. Brent crude dropped below $95 per barrel, and defense contractors fell on anticipated resistance to the $1.5 trillion Pentagon budget. Against that backdrop, Costco stood out: the stock trades at roughly 46x forward earnings and above $1,065 per share, and its short-dated call options offer a lower-cost way to participate in a name that has rarely been cheap.