Luke Kawa2/24/25

Stocks drop again as tech tumbles

The S&P 500 fell 0.5%, closing below its 50-day moving average and near its lows of the day to mark the benchmark gauge’s first three-session losing streak of 2025. The Nasdaq 100 gave back 1.2% while the Russell 2000 declined 0.8%.

Despite the losses, 74 more S&P 500 constituents advanced than declined.

Tech was far and away the worst-performing S&P 500 sector ETF, off 1.4% on the day. Healthcare, a more defensively oriented part of the market, did the best.

Berkshire Hathaway was a particularly bright spot on the tape, up 4% after reporting robust quarterly results and a humongous cash pile.

Price action continues to be market by a momentum unwind: Palantir was down double digits, the worst performer in the S&P 500, while companies levered to AI data centers and power generation, like Arista Networks and Vistra, also got clobbered amid concern that Microsoft is oversupplied in this area. The Magnificent 7, as a basket, are down 3.3% on the year after falling 4.4% in the past three sessions, with Nvidia weighing the most on the cohort to open the week.

Alibaba’s mammoth run reversed hard, with shares off double digits as the company outlined plans to spend over $50 billion on the AI build-out over the next three years.

JPMorgan declined despite a positive day for financials as CEO Jamie Dimon said he is “reluctant” to buy back stock at these levels.

Super Micro Computer got dumped ahead of tomorrow’s deadline to submit filings or be delisted from the Nasdaq.

Rivian sank after Bank of America downgraded shares of the electric vehicle maker, citing a host of challenges ahead.

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Constellation, Talen, and NRG surge as BNP analysts see “golden (AI)ge” ahead for them

Power producers Talen Energy, Constellation Energy, and NRG jumped Wednesday, benefiting in part from a rosy write-up by analysts at BNP Paribas, who launched coverage of all three at “outperform” and argued that the AI energy trade — a big AI-related winner in recent years that has lagged a bit recently — is due for a second wind.

That view was in a broad note on the independent power producer segment of utilities industry that the analysts published Wednesday, titled “The Golden (AI)ge of IPPs.”

Here’s the gist of it:

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

US independent power producers (IPPs) have lagged the AI basket for 6+ months, after garnering much attention in 2023-1H25. Investors are caught up in the minutia of perceived headwinds: underwhelming pace of power purchase agreement deals, distributed behind-the-meter solutions stealing the ‘time-to-power’ edge, pressure for data centers to bring generation and not tighten the grid, etc.

And yet, as we demonstrate, despite all this noise, the wave of rising load is at the cusp of an acceleration that will nonetheless overwhelm new supply—well into the 2030s, in our view. Hop on or risk missing the resurgent AI trade this decade.

BNP’s price targets for the stocks — Constellation ($407), NRG ($232) and Talen ($549) — implied gains of 32%, 50%, and 68% respectively. (Though today’s gains would reduce those potential upside targets somewhat for new buyers.)

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