Why are stocks of companies without which AI cannot exist falling?
The market agrees that electricity is the new brake on AI. Yet the stocks of power producers are losing 15 to 30% this year, while one turbine factory is sold out until 2030. Microsoft's contract with Chevron shows where the profits are really flowing.
Key points
Power producer stocks are losing 15 to 30% this year, even though the whole market is talking about a power shortage for AI
Microsoft has secured its own power plant in Texas with a larger output than the entire Temelín
Chevron expects a return of around 15% on the Kilby project, independent of oil prices
474 GW of requests are queued for connection in Texas and Governor Abbott has suspended the whole process
GE Vernova is sold out until 2030 and new orders are a fifth more expensive than last year
Power has run out, and yet energy stocks are falling
Last autumn, Microsoft $MSFT CEO Satya Nadella admitted something no one would expect from a tech giant: he has chips in stock that he has nowhere to plug in because there is no electricity. This summer, CFO Amy Hood confirmed that demand for capacity still exceeds supply. So the whole market agrees on one thing: the brake on AI is no longer the chip, but the megawatt.
By that logic, those who produce megawatts should be celebrating. But the numbers say the opposite. Vistra $VST shares are losing 14.8% this year, Constellation Energy $CEG over 21%, Talen Energy $TLN 21%, and NRG Energy $NRG as much as 29.5%. The S&P 500 index has added 12.8% in the meantime. And all this in a year when Vistra reported EBITDA operating profit growth of 31% and has electricity sales for 2027 secured at 94%.
On the other side of the same story stands GE Vernova $GEV : the stock has strengthened by 37.5% this year, trading around $923, and the company has a market value of about $245 billion, or over 5 trillion crowns. It makes gas turbines, the machines that will produce the electricity.
So who is really profiting from the power shortage, and who is just a backdrop in this story? The answer lies in one contract from West Texas.