Five-Stock Portfolio #2: Energy
AI is an energy market game-changer
Artificial intelligence is here, and it’s hungry. Current projections for how much power AI server farms will consume are, well, shocking. From a recent Scientific American article:
Every online AI interaction relies on a scaffolding of information stored in remote servers—and those machines, stacked together in data centers worldwide, require a lot of energy. Around the globe, data centers currently account for about 1 to 1.5 percent of global electricity use, according to the International Energy Agency. And the world’s still-exploding boom in artificial intelligence could drive that number up a lot—and fast.
A peer-reviewed analysis published this week in Joule is one of the first to quantify the demand that is quickly materializing. A continuation of the current trends in AI capacity and adoption are set to lead to NVIDIA shipping 1.5 million AI server units per year by 2027. These 1.5 million servers, running at full capacity, would consume at least 85.4 terawatt-hours of electricity annually—more than what many small countries use in a year, according to the new assessment.
Energy Stocks Are A Must-Own
Two things are obvious from the above: First, we’re going to need way more power than we’re currently producing. Second, there’s no way we’ll be able to build that much new capacity in time. Shortages will ensue, raising the cost of electricity and the things necessary to produce it. So we should own the stocks that benefit from this trend.
This Five-Stock Portfolio contains high-quality names in uranium, oil/gas, and copper (a metal that’s needed to move all those new electrons around). To flesh out their stories, read the following primers:
Uranium Miners: Let’s Start With Cameco
Let's Add Some Oil Stocks To The Portfolio
Is The Copper Story As Good As Everyone Says?
Let's Start Building That Copper Portfolio