Vertiv(VRT) The Motley Fool·2024-07-31 18:52AI Adjacent Companies and Market Reaction - Vertiv Holdings, Constellation Energy, and NuScale Power surged in Wednesday's trading, with shares up 9 9%, 11 6%, and 6 5% respectively [1] - These companies are considered "AI adjacent" due to their potential to benefit from the increasing power and electricity demands of AI data centers [2] - The recent sell-off in AI-related stocks led to significant pullbacks, with Constellation down 27%, Vertiv down 29%, and NuScale down 44% from their all-time highs [8] Earnings and Commentary Impact - Microsoft and AMD's strong earnings reports and positive AI outlooks alleviated fears of slowing AI growth, boosting AI-adjacent stocks [3][9] - Microsoft CEO Satya Nadella highlighted strong demand for AI-powered products, with CoPilot seats doubling quarter over quarter and continued investment in Azure AI training [10] - AMD exceeded expectations with 115% year-over-year data center growth and raised its 2024 MI300 AI chip sales guidance to 4 billion [11] Company-Specific Developments - Vertiv reported strong Q2 results and raised full-year guidance, despite forecasting a sequential decline in Q3 orders, citing strong demand pipeline [5] - Constellation Energy and NuScale Power, both nuclear power-focused companies, saw significant year-to-date gains of 45% and 190% respectively, despite recent sell-offs [6] - NuScale faced a short-seller attack questioning its technology and SEC investigation claims, but the company denied the allegations and stated regulatory inquiries were routine [7] Market Outlook - The recent pullback in AI-related stocks is viewed as a healthy correction rather than the start of a tech crash, with long-term growth prospects remaining intact [12] - The earnings season reinforced the AI growth narrative, suggesting potential entry points for investors with a long-term perspective [12]