Nvidia damage spreads to energy stocks

(This story originally appeared on Callaway Climate Insights, a partner of ClimateCrisis 247)

The lack of investor enthusiasm for Nvidia’s NVDA -0.76%↓ 78% jump in revenue last quarter underscores concerns that the AI boom is losing its magic, and the ripple effect is spreading to shares of energy providers who power the industry.

Shares of both Constellation Energy CEG -1.33%↓ and GE Vernova GEV 0.19%↑ are down more than 10% in the past week, mirroring those of AI leaders Nvidia and Broadcom AVGO -1.43%↓. While nothing Nvidia said about its sales pipeline or even guidance for the coming quarter was alarming, the lack of excitement around it seems worth consideration following two years of a soaring AI market.

The energy provider theme — that huge leaps in AI research and production will require an army of new data centers to power the chips behind it — has vaulted the once-sleepy energy sector to new highs in the past year, with shares of CEG and GEV particularly benefitting as they cut deals with Big Tech to provide the power.

But China’s DeepSeek shocked the market last month when it said it could produce similar advances in AI without the cost, putting a hole in the investment theme that continues to grow, despite solid earnings this week.

The AI story will continue to expand in different ways, but if earnings such as these are starting to bore investors, then a more thorough look at valuations of any stocks tied to the AI theme is likely at hand.