U.S. stocks spent Friday deciding what a strong jobs report is worth. The morning print said the job economy is running hotter than anyone had priced, and the session split the difference: the AI trade bought back its worst week in months while most of the market watched. Everyone was still yelling about Democrats cutting datacenters.

The S&P 500 rose 0.3% and the Nasdaq Composite gained 1.4%, while the Dow fell 0.4% and the Russell 2000 added 1.0%. Only three of the eleven sectors finished green. Technology led, up 1.5%, and consumer staples lagged, down 1.3%, while the big banks slipped, with JPMorgan and Bank of America both lower on the day.

The Labor Department published an October jobs report that ran away from expectations: 165,000 jobs added against forecasts near 65,000, unemployment down to 4.1%, and the prior two months revised up by a combined 84,000. The 10-year Treasury yield, the rate that anchors mortgages and corporate borrowing, rose about 6 basis points to 4.90%, and CME FedWatch pricing put the odds of a December rate hike near 78%.

In earnings, IonQ's record quarter turned out to be half quantum computers and half a chip foundry it bought this summer, and the stock loved both halves. DraftKings is sending this year's profit into prediction markets, roughly $700M of it. Firefly's deal made AST SpaceMobile a rocket company on paper, Recorlev keeps dragging Xeris' billion-dollar target closer, and Kevin's feature in this issue asks how much of U.S. growth data centers are really carrying.

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Voters sided with data center opponents in 40 of the 41 local ballot contests Ballotpedia tracked Tuesday. And everyone is losing their minds!

Five outright bans passed, and voters rejected 13 measures that would have helped or endorsed development. In Wilmington, Ohio, that meant voting down four rezoning measures that would have opened specific sites to construction. So does this mean the Democrat socialist communists are going to stop our precious datacenter growth and doom the economy, or what? 🗳️

Well, obviously not, but let’s look into the numbers because this skimming social media and just regurgitating crap is pissing me off.

S&P Global looked into this idea, that data centers are cool and noisy and all, but locals are up in arms, so how many are getting kicked out of town? By Oct this year, more than 50 U.S. projects were canceled amid local opposition. A separate S&P Global Ratings analysis tracked 146 projects that were delayed or canceled, with some overlap from that list but including projects that the firms themselves decided not to persue. The ballot tally gives us a sense of how hard it may get to win local approval for the next build. Still, how much do data centers effect our total economic growth?

The RIP: When it comes to economic growth this year through September, U.S. real GDP grew 2.07%. Data center construction added about 0.10 percentage point to that total. That’s about one-twentieth of the growth. And that’s after inflation-adjusted annual spending on data center buildings nearly quadrupled from about $8B in 2021 to $31B in 2025. 🏗️

Data center building in the most recent quarter added about 0.19 percentage points, the most looking back through five years of BEA data. Meanwhile, real GDP grew 3.37% at an annualized rate. The way the BEA collects economic growth data, a canceled proposal that never broke ground does not reverse past construction GDP. The measure estimates the dollar value of construction work each month, and no work, no growth.

Now add in the servers. Add computers, software, and power construction, then adjust for computer imports and exports, and the broader investment estimate rises to 0.40 percentage points of that 2.07% growth over the past year. That’s roughly one-fifth. Those categories include plenty of spending unrelated to AI, but to throw the tech billionaires a bone, it might give you a better sense of the tech spending scale than the construction number alone. 🔌

Let's put this in public equity terms.

Microsoft $MSFT ( ▼ 0.99% ) said Azure revenue rose $10.8B worldwide from a year earlier in its September-quarter filing. The filing doesn’t say how much of that growth came from services produced in the U.S. When a business rents Azure computing power, that bill is a business expense, not growth for GDP. When Microsoft buys a new server for a U.S. data center, that’s business investment, with any imported value subtracted through trade. Only the difference between what a customer pays, and what Microsoft pays to bring services to the customer, is GDP growth.

And if Microsoft pays OpenAI for models it uses to serve Azure customers, that value OpenAI creates in the U.S. counts toward GDP. Microsoft subtracts that fee when calculating its own contribution, so the same work is counted once. Point being: that value is not a large portion of U.S. growth.

This massive selloff hitting tech looks like a long time coming. A red dip after months of gains is a lot more like the trillion-dollar stock price cuts this earnings season despite insane money printing quarters, like Alphabet -12%, Meta -7%, and Amazon -1.4%. All from new capex spending announcements, all for unclear future returns AI build out^tm projects.

The insane valuations and investments these firms are participating in are not counted in economic growth, they are fugazi until actual, measurable growth comes out at the end of the great machine.

-kt

IonQ reported third-quarter results Thursday after the bell, its first quarter with the SkyWater chip foundry inside the numbers. Quantum computers brought the growth story. The foundry brought a lot of the revenue. Friday, the stock treated both as good news. ⚛️

The RIP: $IONQ ( ▲ 23.42% ) rose 24% Friday after revenue hit $173.8M, up 336% from a year earlier and well above the $141.5M analysts expected. The adjusted loss was $0.29 a share, narrower than the $0.31 expected.

The release splits the quarter in two. IonQ Platform revenue, the quantum systems and sensing business, rose 127% to $90.3M. SkyWater's foundry services added $83.5M in the first two months under IonQ's roof. Half the record quarter was a business IonQ bought this summer. 🏭

IonQ reported $564M of net income, and nearly all of it was a noncash gain from repricing its own warrants. On an adjusted basis, the company still lost $133.6M in the quarter. Growth is real. It is also expensive. 💸

DraftKings reported third-quarter results Thursday after the bell and grew revenue 16%. Then it cut its full-year outlook anyway, because the company is pouring up to $700M into DraftKings Predictions, its event-contract business. Friday, shareholders got the bill. 🎲

The RIP: $DKNG ( ▼ 21.3% ) fell 21% Friday after revenue of $1.33B missed the $1.39B estimate and the adjusted loss hit $0.53 a share. Adjusted EBITDA was a $317M loss, more than double a year earlier.

The release lays out the trade. Full-year revenue guidance fell to $6.35B to $6.55B, and adjusted EBITDA guidance dropped from $700M to $900M down to $175M to $275M. The guidance cut is roughly the size of the Predictions budget. Finance chief Alan Ellingson attributed the revised outlook to that investment, and CEO Jason Robins said more than 1.6M customers have used Predictions this year. 🏈

AST SpaceMobile, a satellite company, announced Friday that it will build its own heavy-lift rocket, Blacklift, to launch its BlueBird satellites. Firefly Aerospace supplies the engines, licenses the design so AST can build them itself, and provides engineering help. The package is worth more than $1.3B. 🚀

The RIP: $FLY rose 37% Friday on the agreement, and $LUNR gained 21% as space names caught the same bid. The deal covers 36 engines for AST's first three rockets.

The money splits three ways. About $800M pays for the engine license upfront, half in cash and half in 10M to 14M shares of AST stock with lock-up periods. The 36 engines, 27 Miranda and nine vacuum-variant Vira, cost $250M. Engineering support over three years costs another $250M. Firefly gets paid partly in the customer's own stock. 🛰️

Blacklift is a 20-ton reusable rocket, and AST plans to unveil it in New York on November 12, with first flights targeted for late 2028. Intuitive Machines had no deal of its own Friday. Its stock rose on the sector's day, the kind of sympathy move that lasts exactly as long as the bid does. 🔭

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📺 What the Mag Seven Said During Election Week

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