We’re buying 25 shares of Eaton just below $300 each. Following Friday’s trade, Jim Cramer’s Charitable Trust will own 325 shares of ETN, increasing its weighting to about 2.7% from about 2.5%. Friday’s market losses picked up steam in the afternoon with momentum stocks continuing to roll over and cyclical stocks falling on weakening economic data. Fortunately, we have limited the impact of these losses by building up a huge war chest of cash. It’s no secret that the economy has slowed over the past few weeks. Using the Atlanta Fed GDPNow forecast as a guide, the latest estimate of first-quarter economic growth is 2.3%, down from a 3.9% estimate on Feb. 3. We’re not surprised to see consumer discretionary and industrials as two of the worst-performing sectors this month. However, we do expect the economic slowdown to be short-lived. So, we’re dipping into our cash hoard to beef up one of those beaten-down industrial names, which makes electrical components and power management systems used to run energy-intensive AI data centers. With Eaton shares trading below their DeepSeek freakout levels, we see this as an opportunity to buy more. ETN 1Y mountain Eaton 1 year The first instinct when the Chinese startup claimed that it made a more efficient, lower-cost large language model was that the world wouldn’t need as many data centers to power artificial intelligence. Since data centers are one of Eaton’s largest end markets and one of the company’s fastest-growing, the DeepSeek news on Jan. 27 caused shares to fall 15% to about $311 each. Unlike Club AI chip king Nvidia , whose stock has recovered most of its DeepSeek losses, Eaton shares have a longer road to recovery. However, as we’ve learned in recent weeks, there has been zero change in the spending habits of the big tech hyperscalers building out these data centers. In fact, these titans plan to invest more money in their AI infrastructure in 2025 versus last year Club names Amazon , Microsoft , Meta Platforms , and Alphabet all raised their capital expenditure outlooks for this year, erasing concerns that one would break ranks and slow down their investments. We also heard Eaton’s thoughts on the subject when the company reported strong earnings on Jan. 31. During the quarterly conference call, management explained that a shift toward more inferencing data centers and away from training specialized data centers would be a positive development for the business because it would speed up construction times without a change in the amount of electrical needed. In short, DeepSeek’s impact on the pace of AI infrastructure investment has been overblown. And, that’s why we are buyers of Eaton, a stock we believe in for the long haul. (Jim Cramer’s Charitable Trust is long ENT, AMZN, MSFT, META, GOOGL, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
