The AI industry coughed and the power industry is getting a cold.
The S&P 500 hit a record high on Thursday afternoon, but in the cold light of Friday, several artificial intelligence-related companies are feeling a chill. A trio of stories in the data center and semiconductor industry revealed dented market optimism, driving the tech-heavy NASDAQ 100 down almost 2% in Friday afternoon trading, and several energy-related stocks are down even more.
Here’s what’s happening:
- Bloomberg reported Friday that Oracle, which is helping lead the data center buildout for OpenAI and has become a poster boy for the stock market fluctuations of the whole sector, pushed back the projected completion dates for some of its projects from 2027 to 2028. The delays are due to “labor and material shortages,” sources familiar with the matter said.
- Also on Friday, Fermi, the data center developer founded by former Energy Secretary and Texas Governor Rick Perry, said in a regulatory filing that one of the companies that had been planning to rent space to was “terminating” its agreement to fund up to $150 million of construction costs. Fermi went public in October and announced plans later that month to order four nuclear reactors to power its data centers. Earlier, the company had said that it had signed a “non-binding letter of intent” with the tenant to lease a portion of its planned data center, which it followed up with a November agreement to help fund construction. Fermi shares are down more than a third in early Friday afternoon trading, and have fallen by around two-thirds since their post IPO high.
- Finally the chip designer Broadcom, which sells chips to AI giants including Google and OpenAI, reported earnings on Thursday that exceeded analyst expectations for revenue, but the stock dipped nevertheless as the company’s $73 billion backlog of chip orders for the next year and a half “disappointed some investors,” Bloomberg reported. Analysts also attributed the sell-off to Broadcom’s AI-specific processors having smaller gross margins than the rest of its business. Broadcom shares are down over 11% in Friday afternoon trading.
Taken together, the three stories look like an AI slowdown, at least compared to the most optimistic forecasts for growth. If so, expectations of how much power these data centers need will also have to come down a bit. That has led to notable stock dips for companies across the power sector, especially independent power producers that own power plants, many of whose shares have risen sharply in the past year or two.
Shares in NRG were down around 4.5% on the day on Friday afternoon; nuclear-heavy Constellation Energy was down over 6%; Talen Energy, which owns a portfolio of nuclear and fossil fuel plants, was down almost 3% and Vistra was down 2%. Shares in GE Vernova, which is expanding its gas turbine manufacturing capacity to meet high expected demand for power, were down over 3.5%.
It’s not just traditional power companies that are catching this AI chill — renewables are shivering, as well. American solar manufacturer First Solar is down over 5%, while solar manufacturing and development company Canadian Solar is down over almost 9%.
Shares of Blue Owl, the investment firm that is helping to fund the big tech data center buildout, were down almost 4%.
The fates of all these companies are deeply intertwined. As Heatmap contributor Advait Arun wrote recently, ”The commercial potential of next-generation energy technologies such as advanced nuclear, batteries, and grid-enhancing applications now hinge on the speed and scale of the AI buildout.” Many AI-related companies are either invested in or lend to each other, meaning that a stumble that looks small initially could quickly cascade.
The power industry has seen these types of AI-optimism hiccups before, however. In January, several power companies swooned after Chinese AI company DeepSeek released an open source, compute-efficient large language model comparable to the most advanced models developed by U.S. labs.
Constellation’s stock price, for example, fell as much as 20% in response to the “DeepSeek Moment,” but are up over 45% this year, even factoring in today’s fall. GE Vernova shares have doubled in value this year.
So it looks like the power sector will still have something to celebrate at the end of this year, even if the celebrations are slightly less warm than they might have been.
