Alger EVP: Still Massive Opportunity for AI

Alger’s Ankur Crawford warns that political backlash over AI infrastructure could become a future constraint on data center and chip buildouts, even though it has not yet slowed projects. She argues opposition is fueled by misinformation and that investor risk is near-term confusion, which could drive volatility. Overall impact is more sentiment/positioning-driven than an immediate operational hit.

Analysis

This is not a near-term earnings shock; it is a duration and multiple risk. AI infrastructure trades are priced off a long runway of capex, so even a modest increase in permitting, zoning, or political friction can compress multiples before it shows up in revenue. The first-order market reaction is likely higher implied volatility in the semiconductor and AI-equipment complex rather than immediate estimate cuts.

The most important second-order effect is relative scarcity. If greenfield data-center starts slow, existing capacity owners and lease-based operators should gain pricing power versus hardware-dependent growth names that need a steady stream of new projects. That favors established colo and powered-shell franchises over the more crowded "sell the picks and shovels" basket, while also pressuring suppliers whose backlog assumptions assume uninterrupted buildouts.

The contrarian point is that consensus may be underpricing cumulative friction: no single headline is needed if local opposition adds 6-12 months across enough projects. The real tell is not commentary, but whether hyperscalers maintain capex guidance and whether utility interconnection queues, permit approvals, and land acquisitions keep clearing. If those stay healthy over the next two earnings cycles, this becomes noise; if not, the de-rating can be sharp and persistent.

Key Decisions for Investors

• Buy a 1-3 month put spread on SMH or NVDA on any strength; this is a volatility hedge against policy-driven multiple compression, with the cleanest payoff if AI capex names gap lower on permit or zoning headlines.
• Pair trade: long EQIX or DLR vs short SMCI or VRT for the next 1-2 quarters; if project timelines slip, existing capacity should be relatively more valuable than names dependent on new-build cadence.
• Avoid chasing ETN/AME/PWR into the rally until hyperscaler capex and utility load forecasts confirm no slowdown; treat these as watchlist longs, not outright buys, because backlog can de-risk only if demand stays on schedule.
• Set a falsifier alert: if two consecutive hyperscaler earnings calls keep AI infra capex guides intact and state-level permitting reform advances, cover short hedges and expect the de-rating risk to fade.