Another data center-related stock that beat this week was Comfort Systems (FIX), which announced that its first-quarter revenue rose 56.8% to $2.87 billion compared to $1.83 billion in the same quarter a year ago. Also notable in the past year, Comfort Systems’ order backlog surged 80.7% to $12.45 billion compared to $6.89 billion. The analyst community was expecting revenue of $2.35 billion and earnings of $7.19 per share, so the company posted a 18.1% revenue surprise and a 46.2% earnings surprise.
Speaking of order backlog, I discussed on Fox Business that record order backlogs are now propelling many data center-related companies higher. For example, during the first quarter, GE Vernona’s (GEV) order backlog rose $18.3 billion, so the company raised its revenue and earnings guidance. GE Vernova announced better-than-expected results and strong guidance, posting a 1.5% revenue surprise and a whopping 785.3% earnings surprise.
Iran is refusing to negotiate with the U.S., but the ceasefire has been extended infinitely by President Trump, and there are hopes of new talks whenever the internal power struggle in Iran is over. I should add that the U.S. Navy is using sea drones to help clear any mines that may be in the Strait of Hormuz, so until this mine sweeping is completed, the Strait of Hormuz is expected to remain closed.
Meanwhile, the EU is just hurting itself by pushing more expensive solutions to fossil fuels. Specifically, the EU in Brussels is pushing for more electrification to fight the energy shortages enveloping Europe. Specifically, the EU has proposed an “Emissions Trading System” that is expected to face significant challenges. Due to a jet fuel shortage, Germany’s Lufthansa is canceling 20,000 short-haul flights. Obviously, electrification and the EU’s proposed Emissions Trading System will not fix the jet fuel shortage. This will continue to hinder Germany and many manufacturing countries. Italy is in better shape than Germany, since gets light sweet crude from Nigeria and Libya, so it is not expected to experience any jet fuel or diesel shortages.
The fact that many of Tesla’s EV competitors are still losing money bodes well for its automotive business. this week reported sales and earnings that were better than analyst consensus estimates, so it appears that the company is a near-term winner from the chaos in the Strait of Hormuz. Naturally, this is not enough for Elon Musk, who is now boasting about the ramp-up of the Optimus 3 robot that will be used in Tesla EV factories. Finally, since all new Teslas can be a Robotaxi, after you go home and park the car, in theory, your Tesla may leave your home to be a Robotaxi.