The AI Build-Out Grew 30% and Got Dumped

Vertiv, Coherent and Modine posted blowout data-center numbers and led the week's losers, while pre-revenue psychedelics (+14.4%) and space (+10.6%) ran — the week the tape paid for promise, not profit.

The Tape

The tape spent this week selling the one part of the AI trade that's actually making money. AI Power — the cooling, optics and switchgear underneath the data-center build-out — fell 8.7% into a wall of blowout quarters: Coherent's data-center revenue jumped to $1.36B and the stock dropped 15.1%; Modine grew fiscal sales 23% to $3.2B and fell hardest of all. Meanwhile Psychedelics, a sector that sells almost nothing, led the whole board at +14.4% — money fleeing the ledgers that earn and crowding into the ones that only promise.

Leaderboard

Sector by sector

• Psychedelics +14.4% — Cybin ran 29.5% with no filing to explain it, while bellwether Compass Pathways booked $91.2M of Q1 net income that came from a warrant fair-value change, not a drug it sold.
• Space +10.6% — AST SpaceMobile, the satellite-to-phone venture, jumped 25.2% in the very quarter it lost its Block 2 satellite on April 19 and flagged a $155M–$160M write-off; losing hardware in orbit is bullish now.
• Defense + Drones +9.9% — AeroVironment, the drone-maker, surged 34.3% on its BlueHalo deal, while L3Harris grew backlog to $21.1B from $14.6B and finished last for the crime of already being big.
• Meme Stocks +9.6% — Reddit earned its 21.1% with revenue up 69% to $663M and net income of $204M; Trump Media, up 13.6%, reported $871K of revenue and a $405.9M loss, most of it a writedown on its own crypto.
• Biotech +9.5% — Moderna, the vaccine-maker, soared 32% even as its Q1 loss widened to $1.34B; the sector's bid came from Biogen agreeing to buy Apellis for ~$5.6B.
• Emerging Therapeutics +9.4% — Prime Medicine, a gene-editing developer, ran 24.0% in the same filing that flagged going-concern doubt over its $135.5M of cash. Read past the headline before you buy the science.
• Fast Food +7.3% — Jack in the Box led at 28.8% despite continuing-operations earnings falling to $26.9M and a $47.4M loss on dumping Del Taco; McDonald's grew income to $1.98B and finished last.
• Weight-Loss +7.3% — Eli Lilly's Zepbound revenue nearly doubled to $4.16B and carried the category; the hangers-on rode the halo, with Hims & Hers up 12.5% while swinging to a $92M loss from a $49M profit.
• Gaming +6.1% — AppLovin, the mobile ad-tech firm, grew revenue 59% to $1.84B and cleared $1.21B in net income; Logitech, hostage to Amazon at 18% of gross sales, fell 8.2%.
• Music +6.1% — Reservoir Media, a song-rights owner, sat dead flat with two takeover bids on the table — Irenic at $10.00–$11.00 and Wesbild at $10.50 — the market waiting on a committee to name a number.
• Robotics +5.9% — Teradyne, which makes chip-testing gear, grew Q1 revenue 87% and quadrupled net income to $398.9M, then fell 13.6% — the AI-infrastructure curse reaching into robotics.
• Sports & Betting +5.3% — DraftKings swung to a $21.1M profit and bought CFTC-licensed exchange Railbird for ~$84.8M to launch event contracts; Gambling.com fell 8.7% after a Google update cut new customers 5% to 454,000.
• Crypto +3.3% — Solana led the majors up 11.3% to $82.26 and Bitcoin added 2.8% to $62,521, while Dogecoin gave back 12.5% — the joke coin behaving like the joke when risk gets choosy.
• Quantum +2.2% — IonQ posted $804.6M of "net income" that was almost entirely a $1.06B non-cash warrant gain against a widening $271.5M operating loss, and fell 8.4%; Arqit jumped 34.4% on no filing at all.
• Entertainment +2.0% — Netflix rose 8.1% and nearly doubled net income to $5.28B, then pocketed a $2.8B termination fee after Warner Bros. Discovery walked from its merger to chase Paramount.
• Hype Goods +2.0% — e.l.f. Beauty ran 18.4% on ~$1.67B of sales bought with a ~$400M marketing budget — a quarter of revenue — while quietly profitable Ulta, buying back $560M of stock, fell 3.7%.
• Nuclear Energy -6.1% — Constellation, the largest U.S. nuclear operator, grew Q1 net income to $1.60B from $129M and still dropped 10.7%, its ~$21.8B Calpine purchase now reading more like debt than demand.
• AI Power -8.7% — Modine, which makes cooling gear for data centers, grew fiscal sales 23% to $3.2B and fell hardest at 16.5%; Coherent's data-center revenue jumped to $1.36B and the stock dropped 15.1%.

The Stories

The AI Build-Out Grew 30% and Got Dumped

The tape spent the week selling the one part of the AI trade that's actually earning money. Vertiv, which builds the cooling systems that keep data centers from melting, grew Q1 sales 30% to $2.65B and more than doubled net income to $390.1M. Its reward was to lose the least, down 5%.

Everyone else in the picks-and-shovels aisle fared worse. Modine, another cooling supplier, grew fiscal sales 23% to $3.2B and fell hardest at 16.5%. Coherent, the optics maker, watched its data-center revenue jump to $1.36B and swung to $191M of net earnings from a loss — and dropped 15.1%.

The verdict was uniform: good numbers, wrong week.

The other half of the AI-power trade cracked too. Constellation Energy, the largest U.S. nuclear operator, grew Q1 net income to $1.60B from $129M and fell 10.7% — this after paying ~$21.8B for Calpine in January.

Talen Energy told the same story. Q1 revenue nearly tripled to $1,129M, capacity revenue quadrupled to $207M, and the stock lost 10.2% on no fresh bad news.

When a sector this profitable gets dumped, the fundamentals were never the problem. The buyers left before the results did.

Hope Beat the Ledger Everywhere You Looked

The week's biggest gainer sells almost nothing. Psychedelics rose 14.4%, led by Cybin up 29.5% on no filing anyone could point to.

Bellwether Compass Pathways reported $91.2M of Q1 net income — but read the fine print. It came from a warrant fair-value change, not a drug it sold.

The pattern held one sector over. In emerging therapeutics, up 9.4%, Prime Medicine ran 24.0% in the very filing that disclosed going-concern doubt over its $135.5M of cash. Recursion Pharma saw revenue fall to $6.5M from $14.7M and rose 17.6% anyway.

Even in biotech, the biggest mover was the deepest in the red. Moderna soared 32% while its Q1 loss widened to $1.34B and cost of sales ballooned to $955M from $90M.

In fairness, some of the buying rests on a real catalyst — Intellia's hereditary-angioedema drug posted positive Phase 3 data and a 2027 launch plan. But it rose 13.3%, less than the company warning it might not stay solvent. The science sells; the P&L is an afterthought.

One Meme Basket, Two Very Different Companies

Meme Stocks rose 9.6%, and the label did double duty — flattering some names, shielding others.

Reddit is a real company now. Revenue grew 69% to $663M, net income hit $204M against $26M a year ago, and the stock earned its 21.1%.

Trump Media is not. It reported $871K of revenue and a $405.9M net loss, most of it a $243.9M writedown on its own crypto holdings — and rose 13.6% regardless.

Same tag, opposite businesses. Robinhood grew net revenue to $1.067B while Lucid Motors raised ~$1.04B after posting a $1.03B loss. The basket keeps one graduating out and the other hiding in.

Netflix Got Paid to Watch Its Rivals Fight

Entertainment managed only +2.0%, dragged by its legacy names, but the standout barely lifted a finger.

Netflix grew Q1 revenue to $12.25B and nearly doubled net income to $5.28B. Then it pocketed a $2.8B termination fee after Warner Bros. Discovery cancelled their merger to chase Paramount Skydance instead.

Rising 8.1% on someone else's collapsed deal is a good week's work.

The rest of the sector paid for margin, not growth. Fox rose 13.4% though Q1 revenue fell to $3,994M — the market bought its cable EBITDA of $2,371M and ignored the shrinking top line. IMAX went the other way, down 8.3% as revenue slipped to $81.4M and its image-enhancement margins compressed.

The week, visualized