Quick Read
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UBS estimates 30% of planned 2028 U.S. data-center capacity is at risk, threatening NVIDIA's growth since its chips need finished buildings.
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Equinix and Digital Realty barely slipped while Eaton fell 21%, as investors reward landlords holding permitted, powered sites.
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NVIDIA has locked in $279 billion of supply obligations while some buildings for its chips exist only as plans.
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One Number: 30% of 2028 Capacity at Risk
About 30% of the data-center capacity the U.S. plans to add in 2028 could be at risk, according to a UBS estimate reported by Reuters. That figure is an analyst estimate of proposed capacity additions. It is separate from capital spending companies have already committed. It matters most to NVIDIA( NASDAQ:NVDA ), because its growth story depends on those buildings getting finished.
Much of the AI selloff has been treated as a valuation reset. The 30% warning raises a different question: can the power, transmission, construction labor, cooling, financing and local approvals behind the AI boom arrive on the schedule investors expect? Delays anywhere along that chain can affect the entire investment thesis.
What It Means for AI's Biggest Supplier
NVIDIA's latest results show how much depends on new capacity. In the second quarter of fiscal 2027, Data Center revenue reached $89.023 billion, up 117% year over year. Management guided third-quarter revenue to $108.0 billion plus or minus 2% (that figure is management guidance).
To support that growth, NVIDIA's supply obligations rose to $279.00 billion, mostly tied to memory purchases for Vera Rubin production. Those dollars are committed. The capacity UBS identified is still proposed. That gap is the core risk: NVIDIA has locked in its supply while some of the buildings meant to house the chips exist only as plans.
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Management has said the constraint lies outside its own factories. CFO Colette Kress said, "This is a supply-constrained outlook," and the call named data-center availability, power, land and shell capacity, cooling, construction and labor as pressure points. Broadcom( NASDAQ:AVGO ) chief executive Hock Tan was more direct: "To deploy an AI data center at scale, land, power and shell are major constraints and dictate timing." He also warned that his company was "not saying that over the next two years, 2027 and 2028, that all 30 gigawatts will go into production."
Market Reaction: Chip and Equipment Stocks Took the Hit
NVIDIA shares fell 21.4% over the past month, from $237.47 on October 7 to $186.64 on November 6, which leaves the stock up just 0.31% for the year. Over the same month, Broadcom fell 22%, Eaton( NYSE:ETN ) fell 20.78% and Constellation Energy( NASDAQ:CEG ) fell 16.57%.
Data-center landlords held up much better. Equinix( NASDAQ:EQIX ) slid 1.85% and Digital Realtyfell 3.47%. Equinix said it lists projects only after permitting hurdles are cleared and power is largely secured. Digital Realty has 1.5 gigawatts under construction, and 63% of it is pre-leased. Investors appear to be rewarding companies that already own permitted, powered sites.
Bear Case: Committed Dollars, Uncertain Buildings
NVIDIA has more than chips tied to the expansion. Its guarantee obligations to AI cloud and data-center partners are capped at $108.5 billion. Days sales outstanding, a measure of how long customers take to pay, rose to 60 days from 45 days because of extended payment terms. The company has invested nearly $50 billion in frontier AI labs. It also expects AI labs it may support with its balance sheet to make up roughly a quarter of its business next year.
Margins are also under pressure. The non-GAAP gross margin was 75.0% last quarter, and guidance calls for 74.0% plus or minus 50 basis points. Management expects margins to bottom in the 71% to 72% range in the fourth quarter as memory prices climb. Kress said, "Memory scarcity today is being driven in large part by the AI buildout itself."
Analysts are split on how far this goes. For the fiscal year ending January 2028, revenue estimates range from $506.483 billion to $778.471 billion. If 30% of planned 2028 capacity shifts, NVIDIA could keep its rising costs and payment risk while some of its growth moves later.
Huang argues that NVIDIA's computing platform is transferable and can be reassigned to other customers. That argument helps only if there are finished buildings with power ready to receive the hardware.
Bottom Line for Long-Term Holders
The 30% warning moves the AI debate from demand to delivery. NVIDIA's next earnings report will test whether the $108.0 billion guidance held while memory costs climbed. On the power side, Constellation's chief executive expects a PJM response around November and cleaner co-location rules in the first to second quarter of 2027. Both are worth tracking. AI demand can stay strong while chip investors wait for the concrete, copper and transformers to catch up.
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