Shares of behind-the-meter power names are selling off in unison at midday Tuesday. FTAI Aviation (NASDAQ:FTAI | FTAI Price Prediction) is down 6%, GE Vernova (NYSE:GEV) is off 6%, and Caterpillar (NYSE:CAT) is lower by 5%. The pain is broad across the group. If you’re wondering why names you have in this space are red, there’s little ‘company specific’ news. Instead, we’ll walk through the big story lines impacting AI stocks today and then see how they’re impacting companies involved in the behind-the-meter AI buildout.
AI Capex Doubts and a 19-Year High in Long Yields
The trigger is a coordinated de-risking out of AI-levered industrials after a Wall Street Journal analysis flagged the scale of hyperscaler power commitments disclosed in SEC filings. Per the report, “Nine top tech companies had some $3 trillion of off-balance-sheet commitments mostly related to AI, according to a Wall Street Journal analysis of footnotes in their most recent securities filings. Those obligations are growing faster than traditional ‘capex,’ which totaled about $600 billion over the past year they reported, and were about triple what the companies owe under their outstanding leases and long-term borrowings.”
Weekend model-maker disclosures also underwhelmed Silicon Valley bulls. Anthropic said annualized revenue reached $65 billion at the end of July, while OpenAI has said its ARR recently hit $40 billion. Big numbers, but softer than the whispers circulating in venture circles. Rates piled on. The 30-Year Treasury hit a 19-year high today, and the 10-year sits at 4.68%. Higher discount rates compress the present value of long-duration BTM backlogs.
The result is a broad sell-off across anything AI hardware. Many software names are seeing rotation into them while defensive industries like healthcare, financials, and consumer staples are rising on the day.
Strong Backlogs, but Everything Downstream Gets Sold
Looking at the big picture: the fundamentals for companies like FTAI, GE Vernova, and Caterpillar remain strong. GE Vernova exited Q2 with a $176 billion backlog, signed 20 gigawatts of new gas orders in the quarter, and raised full-year revenue guidance to $45.5 to $46.5 billion. Caterpillar just posted its first $20 billion quarter, with Power Generation growth of 72% on data center demand and total backlog of $72 billion. CEO Joe Creed said “no one is slowing down at the moment. You know, in fact, if we can get more units out, they’re asking us to give them more units.”
FTAI, the day’s biggest large-cap decliner, sits at a trailing PE of 47x with a consensus target of $364. It came into the session up 6% on the week and 16% year to date, so profit-taking has fuel. Overall, its future looks bright as companies like SpaceX scramble for turbine capacity and the company readies its pivot to supplying more capacity to the AI industry.
The Selloff Spreads Across the BTM Complex
Breadth tells the story. Solaris Energy Infrastructure (NYSE:SEI) is down 4% despite entering the day up 13% on the week. Bloom Energy (NYSE:BE), the group’s hottest name with a YTD gain of 167%, is getting hit hardest at 10% lower. Vertiv is off 7% after running 8% higher last week.
When the market questions the durability of hyperscaler capex, everything downstream of the data center gets sold at once. Turbine makers, engine suppliers, fuel cells, mobile gensets, and power infrastructure names trade as one basket, regardless of individual backlog quality (we profiled seven of these AI power and cooling suppliers in a free report). Rotation flows today favor healthcare, consumer defensive, utilities, and energy, while technology leads to the downside.
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