Bill Baruch Trims Tesla Stock, Buys Pair Of Energy Names: 'Power Is Going To Be A Big Thing With AI'

Blue Line Capital’s Bill Baruch is trimming Tesla Inc TSLA stock and putting the money to work in energy names.

What Happened: Tuesday on CNBC’s “Fast Money Halftime Report,” Baruch announced that he cut back positions in Tesla and Schlumberger N.V. SLB and used the funds to add to positions in Exxon Mobil Corp XOM and Kinder Morgan Inc KMI.

Tesla shares are up more than 20% over the past month and just turned positive for the year this week. The sentiment around Tesla has been “pretty poor,” but Baruch is beginning to notice a shift as the EV maker heads into its upcoming robotaxi event on Oct. 10.

Baruch told CNBC that he’s been adding to his Tesla position on weakness. Given the recent surge in shares, Tesla grew too large in his portfolio so he decided to trim about 25% of his stake, he said. Tesla is also battling technical resistance around current levels, which made taking profit an even easier decision, he added.

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Baruch also sold out of his Schlumberger position for a loss in order to use those losses against some of his gains in Tesla.

“SLB was really a tax harvesting loss to that Tesla profit trade. And what we’re doing is reallocating these monies to energy,” Baruch said.

Why It Matters: The Blue Line Capital founder told CNBC that 13% of his firm’s portfolio is weighted to energy. That didn’t stop him from adding to Exxon Mobil.

Baruch noted that managed money in Crude oil futures has gone net short over the last month or so. When negativity starts to pile up, he suggested that a bottom is usually near.

“Exxon is really cheap. We owned Pioneer Natural Resources before this acquisition and we really like the synergies there. I think Exxon has really outperformed within the space,” Baruch said.

Baruch also increased his exposure to Kinder Morgan as he believes more and more people are going to start talking about the energy requirements of AI.

“Power is going to be a big thing with AI. We really believe in natural gas and the movement, logistically, getting natural gas in order to generate power. Kinder Morgan is going to be right in the thick of that,” Baruch said.

TSLA, SLB, XOM, KMI Price Action: At publication time, Tesla shares were up 1.23% at $253.08, Schlumberger shares were up 0.41% at $43.08, Kinder Morgan shares were up 0.07% at $22.21 and Exxon Mobil shares were down 0.15% at $117.19, per Benzinga Pro.

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Photo: courtesy of Tesla.