Morning briefing · Thu, Jun 11
Power stocks are bleeding hardest, but the smart funds never left
Power Generation dropped 4.63% today, the worst selloff of any AI theme. That looks like panic. It is not. The funds that built this trade quietly are still sitting in it.
Power Generation was the ugliest trade today, down 4.63% as a theme. $ETN (Eaton, which makes electrical equipment for data centers and the grid) fell 6.54%. $GEV (GE Vernova, a power generation and grid hardware company) dropped 5.77%. On the surface, that reads as the AI power buildout trade falling apart.
It is not. Look at the fund positioning. Coatue Management, Philippe Laffont's $30B-plus tech hedge fund, holds $ETN as its fifth-largest position at 5.8% of its portfolio. Lone Pine Capital, Steve Mandel's long-short equity fund, has $VST (Vistra, a power generator) as its single biggest bet at 7.4%. These are not tourists. These are concentrated, high-conviction positions from funds that do deep work before they commit.
One-day moves in infrastructure names are noise. The thesis is the same as it was last week: every new AI data center needs more electricity than the last one, and the companies building that capacity are irreplaceable. When a theme drops 4.63% in a single session but the smartest holders do not move, that is a buying window, not a warning sign. The week is still positive for power, up 2.00%.
*When deep-pocketed, long-horizon funds stay put through a single-day 4.63% drawdown, the market is offering you their conviction at a discount.*