Locking in Gains, Setting New Price Target for This Data Center Play
The power paint point thesis remains, leaving us with ample skin in the game.
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| Symbol | Transaction Type | # Shares Traded | Recent Price $ | Shares Owned After Trade | % Portfolio |
|---|---|---|---|---|---|
| ETN | Sell | 58 | 465.05 | 510 | 3.6 |
After you receive this alert, the Portfolio will sell 58 shares of Eaton Corp. (ETN) at or near $467. Following the trade, the Portfolio will own 510 ETN shares, roughly 3.65% of it assets.
Similar to our move on Tuesday with the shares of Microsoft (MSFT), we are opting to prudently ring the register on the shares of Eaton (ETN) following their 30% move in the last few weeks. As we make this move, after reviewing updated electric utility spending plans as well as AI and data center capacity additions, we are boosting our ETN price target to $500 from $450.
Remember, some of that reflects our catching up on the company’s recent quarterly results that led others to lift their targets earlier this month. We would not be surprised to see further tweaking and fine-tuning coming off quarterly results on Tuesday night from the likes of CoreWeave (CRWV), Super Micro (SMCI) and others.
Given the lift in our price target as well as the multi-year build out of data center and electrical capacity, we are inclined to remain ETN shareholders at least until we see signs that AI usage is peaking. Our current expectation is that will not be anytime soon, but we will continue to track relevant metrics and revise that thought as necessary.
In the near-term, should we see ETN shares continue their recent climb, landing them in an overbought condition, we may opt to ring the register again, especially if the are on a collision course with our revised price target.
Should we see a meaningful pullback in ETN shares, given the nature of the electricity pain point, we would be open to rebuilding the position at lower prices. As such, we are maintaining our Two rating on the shares. We will also lift our checkpoint for ETN shares to $370 from $340.
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade’s executed price here. Be sure to toggle the chart to sort by Purchase Date.)
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At the time of publication, TheStreet Pro Portfolio was long ETN and MSFT.
