Data centers might have a climate problem. With more than 80% of data centers worldwide in regions at high risk of drought, flooding, or wildfires. The implication of these trillions in investment being at elevated risk to weather related disasters could have some major downstream issues. Pluis, a dive into Accenture’s earnings and the challenges facing the IT consulting industry.Listeners, we want your voices heard. The SEC is proposing that companies cut their regular reporting in half to two times a year. We think that&#x27;s a mistake for individual investors.The SEC will take public comments on this issue until July 6th. We want to #savethe10q. Go to https://www.fool.com/investing/2026/06/15/motley-fool-save-the-10q/ to read our full statement and learn how to submit a public comment to the SEC.Companies discussed: META, TSMC, SPCX, TSLA, BMI, ITRI, VRT, ACN, EXLS, GLOB, IBMHost: Tyler CroweGuests: Matt Frankel, Jon QuastlEngineer: Bart Shannon Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode. Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

IT Consulting is Not Having a Good Time

Motley Fool Hidden Gems Investing

# Full Transcript

**Podcast:** Motley Fool Hidden Gems Investing

## Participants

- **Tyler Crowe** (The Motley Fool)
- **Matt Frankel** (The Motley Fool)
- **Jon Quast** (Motley Fool)

## Transcript

[SPEAKER_05] The SaaS Apocalypse Was The Wrong Apocalypse, today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors, Matt Frankel and Jon Quast. So we're going to get into the kind of decline, I guess, if you will, of the IT services consulting industry over the past couple of years based on

[SPEAKER_05] Accenture's earnings that were released earlier today. And we're also going to do something a little bit different. It's a special message from Motley Fool at the end here. But we're going to start today with a recent report on how climate could be a much bigger factor for data centers than originally thought. Now, Matt, you originally brought this idea to the table with us. So what was the market missing about data centers that this report was bringing out?

[SPEAKER_03] Yeah, so there's a study by First Street that was released today. It analyzed 97 different data center markets around the world. So the headline is that nearly 90 percent of our global data center capacity today, not what's being built, is at an elevated risk from climate-related hazards. Think flooding, think windstorms, wildfires. So most underwriting when you're buying insurance for real estate, it still uses historical data, which isn't doing a good job of predicting how climate events

[SPEAKER_03] perform today. I know John lives in Florida. This is why a lot of insurers have exited Florida, because the past-looking data isn't doing a good job. So data centers are generally expected to operate for 20 to 30 years. So this could become a big problem, especially as we rely more heavily on data centers for all of our AI infrastructure needs. So some of the most exposed markets are international, like Asia-Pacific is the worst. But Northern Virginia, which we would call the data

[SPEAKER_03] center capital of the United States, has an above average level of exposure here. So here's the key takeaway. And this is confirmed by separate research, not just this study. So by 2030, more than half of data center hubs are going to find their water supplies stressed due to their cooling demand. Data centers produce a lot of heat. They actually create what are known as heat islands by warming the land around them by as much as 16 degrees in documented cases. Now, all of this can be

[SPEAKER_03] mitigated at least on the building level. You could build buildings to be flood resistant. It's something that you see all the time in Florida. You can see power sources being upgraded. You can see cooling systems. But the stress on the supporting infrastructure, the power grids, the roads, the water supply in the local area, it's a real problem that's being overlooked.

[SPEAKER_05] Th...

IT Consulting is Not Having a Good Time

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

IT Consulting is Not Having a Good Time

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.