Data center capex story is still intact, despite pushback, says Morgan Stanley's Salvatore

• Public and political opposition to data centers is growing due to concerns about utility bills, environmental impact (water usage), and local quality of life (large-scale construction).
• Morgan Stanley maintains a constructive view on data center capital expenditure, expecting over $1 trillion from hyperscalers next year, indicating the overall build-out story is robust.
• However, this opposition will likely lead to conditional approvals, timing delays, and geographical dispersion of new data center projects.
• Political risk is more significant at the local and state levels (governorships) than federal, with states like Ohio, Texas, and Pennsylvania being key.
• The broader fiscal trajectory is largely intact regardless of midterm election outcomes, as major tax changes were already enacted.

Ariana Salvatore of Morgan Stanley discusses the increasing public and political opposition to data center construction, citing concerns over utility costs, water usage, and quality of life. Despite these 'messy' politics, she believes the overall data center capital expenditure story remains robust, though it may lead to conditional and geographically dispersed build-outs.