Bank of America analysts recommend buying ERock because the company makes portable gas generators for data centers and Anthropic might go public someday. Connect those dots if you can. I'll wait.
The thesis works like this: AI companies need power. ERock makes modular gas generators. Anthropic is an AI company. Therefore buying ERock stock is somehow a play on the Anthropic IPO. By this logic, investing in Porta-Potty manufacturers is a play on Coachella ticket sales.
Modular gas generators. Not even the real power grid. Temporary generators you wheel into place when the actual infrastructure can't handle the load. ERock sells the electrical equivalent of a space heater to companies that couldn't get real electricity installed fast enough. Bank of America calls this "high-demand." I call it selling band-aids at a car accident.
The Anthropic IPO does not exist. Nobody knows if it will exist. Nobody knows when it might exist. But some analyst decided ERock stock should move based on vibes about a company that makes chatbots and might ring a bell on the NYSE at some theoretical future date. This is not research. This is astrology with a Bloomberg terminal.
Retail traders will read "AI buildout" and "room to run" and assume they found the next ten-bagger. They will buy ERock shares at whatever price Robinhood shows them. They will not ask why a power company needs the Anthropic IPO to justify its existence. They will not wonder what happens when data centers figure out how to plug into the actual grid. They will simply click buy and check the stock price every eleven minutes until they panic sell at a loss.
ERock's entire bull case depends on AI companies being too stupid or too rushed to install permanent electrical infrastructure. That might be true for six months. Maybe twelve. Then someone runs a wire from the power plant like a f*cking adult and ERock goes back to selling generators for county fairs.
Photo by Don Stouder on Unsplash
Leave a Comment