Weekend lookback · Sat, Jun 6
The AI chip selloff is brutal, but power stocks didn't get the memo
AI compute stocks just had their worst day in months, down nearly 10%. But power generation stocks actually rose. That split tells you something important about where the smart money is hiding right now.
Today was a bloodbath for AI chip stocks. The AI Compute theme, which tracks companies like $NVDA and $AVGO that build the hardware powering AI, dropped 9.31% in a single day. $MRVL fell 16.74%. $ARM fell 12.84%. $AMD fell 10.86%. The trigger was simple: traders killed their hopes of a Fed rate cut, and when borrowing stays expensive, high-growth tech gets hit hardest and fastest.
Here is what everyone is missing. While AI compute collapsed, Power Generation (slug: power) gained 1.02% on the same day. Memory and chip equipment stocks also rose nearly 1%. The market is not fleeing AI. It is repricing it. Speculative chip plays get dumped. The physical infrastructure that has to get built no matter who wins the AI race, the power plants, the cooling systems, keeps buyers.
Lone Pine Capital, a New York hedge fund run by Steve Mandel, already made this call. Their biggest position is $VST, a power company, at 7.4% of their portfolio. That is not a coincidence. The picks that survive a tech rout are the ones the AI boom needs regardless of which model wins.
*When the AI hype trade breaks, what's left standing is the infrastructure the whole thing runs on, and power just proved it.*