Meta's energy deal boosts the data center trade, sending our newest stock to another record high

Markets are up following Monday's turnaround, with potential trade deals on the horizon; the Investing Club's portfolio is seeing gains in GE Vernova and Eaton, boosted by Meta's 20-year nuclear power agreement with Constellation Energy to support growing AI data center power needs. CrowdStrike is set to report earnings as investors look for signs of recovery from a previous software issue and acceleration in recurring revenue. The Club is monitoring CrowdStrike's workforce reduction and the investigation into the Carahsoft-IRS deal.

Analysis

Markets exhibited resilience by turning positive despite initially weak futures, buoyed by an intraday turnaround and the prospect of opportunity, with potential trade deal advancements anticipated as the Trump administration set a Wednesday deadline for offers. A key development highlighting the burgeoning energy requirements of artificial intelligence is Meta Platforms' 20-year, 1.1 gigawatt nuclear power agreement with Constellation Energy, effective June 2027, which also prevented the closure of Constellation's Clinton Clean Energy Center. This burgeoning demand for AI-related power positively influenced share prices of associated companies like GE Vernova and Eaton; notably, GE Vernova has experienced a "parabolic" stock increase since its recent purchase and is trending towards another all-time high, though its current portfolio allocation is considered too small to warrant trimming despite the rapid appreciation. Concurrently, CrowdStrike is scheduled to report earnings, with investors scrutinizing for indications of recovery from a significant IT outage a year prior, specifically seeking confidence in an acceleration of net new annual recurring revenue for the second half of 2025, especially as its stock has appreciated approximately 41% year-to-date amidst ongoing workforce reduction discussions and an investigation into its Carahsoft-IRS deal.

Key Decisions for Investors

• Investors should evaluate opportunities within the AI energy infrastructure theme, highlighted by Meta's substantial power agreement and the positive impact on companies like GE Vernova and Eaton.
• For GE Vernova, despite its significant recent gains, the commentary suggests that the current position size is viewed as small, implying a potential hold or strategic addition strategy if conviction in the AI power demand thesis remains strong.
• Closely monitor CrowdStrike's upcoming earnings report for confirmation of accelerating net new annual recurring revenue in H2 2025 and management's success in moving past previous operational challenges, which are critical for its valuation.
• Remain attentive to developments in U.S. trade policy, as favorable outcomes could further support the current positive market momentum and present new sector-specific opportunities.