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- New Trades: HOOD, META, and Navigating US Energy Policy Shifts
New Trades: HOOD, META, and Navigating US Energy Policy Shifts
Long NEXTracker (NXT) and Short GE Vernova (GEV). The premise is that both stocks have overreacted to their respective policy developments:
Short GE Vernova (GEV)?
GE Vernova’s stock has been running hot (+37% YTD), and recently buoyant again by President Trump’s nuclear energy executive order, which streamlines approvals and boosts nuclear development. While promising, nuclear projects face long timelines due to regulatory compliance and construction complexities, often taking 5–10 years to complete. So, the market’s enthusiasm may be premature. Trading at a forward P/E of 65x for 2025, GE Vernova’s valuation is elevated, compounded by a challenged Wind segment and $300–$400 million in tariff-related costs. Recent technical indicators suggest overbought conditions, with an RSI above 80, pointing to a potential pullback.
Long NEXTracker (NXT)?
NEXTracker saw a sell-off (-7%) after the House passed a budget bill on May 23, eliminating the 30% Residential Clean Energy Credit and phasing out utility-scale solar incentives. However, NEXTracker’s focus on utility-scale solar, which are less impacted by the immediate cuts, mitigates this pressure. With a reported $4.5 billion backlog, the company is still positioned for growth. At a forward P/E of 15x, its valuation is attractive. Solar’s long-term fundamentals as a source of clean and sustainable energy remain compelling, and potential policy reversal, would further support the stock.
Key Risks?
- GE Vernova Upside: Rapid nuclear contract wins, like a recent $15 billion deal in Canada, could sustain the stock’s momentum.
- NEXTracker Downside: Senate passage of the budget cuts could further weaken solar demand and investor sentiment.
Overall, GE Vernova’s rally looks overdone given the long road ahead for nuclear gains, and its high valuation and overbought status invites downside risk. Meanwhile, NEXTracker’s dip seems like a knee-jerk reaction, and its lower valuation and solar’s long-term potential make it an attractive long.
But timing is key. The sell-off in NXT has not reached extreme levels yet, and the momentum behind GEV has not showed signs of fading. Still monitoring for now. Will keep the club posted when I open new positions for this trade.
Adding to my Robinhood position By @JPT_Stanley 12.05.2025
Meta’s Antitrust Case: A Storm in a Teacup By @JoeDelta1 24.04.2025
The FTC’s Argument:
The FTC claims Meta bought Instagram and WhatsApp to “neutralize” potential rivals rather than compete fairly, violating the US Antitrust Act. They point to damning emails from Mark Zuckerberg, like one from 2012 calling Instagram a “potential competitor” to “neutralize” and another from 2014 labelling WhatsApp a “big risk.” The FTC argues Meta dominates a narrowly defined “personal social networking” market…
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