Electrical Demand Opportunities

[ChuckGeb]

In your podcast you highlighted massive increase in electricity demand from data centers. In that most of the major gas basins are constrained by infrastructure pipeline takeaway, our electrical grids seem massively overwhelmed and outdated, and we have an inept energy department, where specifically do you see current opportunities?

It would seem that data centers would need to locate in close proximity to production for immediate needs. Is that what you are hearing? Or possibly NVDA, META and other technology companies projected growth will need to cool their jets until the buildout can be engineered and a permit friendly administration has taken charge and removed the regulatory deep state obstacles to move forward.

[ChuckGeb]

In fact, during CRK’s recent cc, I recall them saying they are in talks with data center developers. In my view long term bullish for gassers and uranium/nuclear. Hopefully we will see things return to Trump speed by this time next year.

[ChuckGeb]

These are BofA Research’s top stocks and ETFs for North American power supplies to future technology:

Within commodities:

Direxion Auspice Broad Commodity Strategy ETF (NYSEARCA:COM) - Top rated commodities ETF
BHP Group Ltd. (BHP) - World’s largest copper mine
Freeport-McMoRan Inc. (FCX) - Blue chip copper exposure
Within nuclear:

Global X Uranium ETF (NYSEARCA:URA) - Top rated nuclear ETF with physical uranium exposure
Cameco Corp. (CCJ) - Top uranium miner, growing contract book
Within utilities:

Pinnacle West Capital Corp. (NYSE:PNW) - Exposure to attractive Sunbelt region
Entergy Corp. (ETR) - Geographic mix exposure to data center demand
Xcel Energy Inc. (XEL) - Retiring of coal plants creates new demand
Public Service Enterprise Group Inc. (PEG) - Nuclear assets attractive tech and data centers
Within industrials:

Eaton Corp. Plc (ETN) - Fast top-line growth, reshoring beneficiary
Vertiv Holdings Co. (VRT) - Thermal products key to AI development
Aspen Technologies Inc. (AZPN) - Positive grid software outlook
GE Vernova Inc. (GEV) - Increasing demand for grid and power equipment
Caterpillar Inc. (CAT) - Back-up generators
Within oil and gas:

Invesco Energy Exploration & Production ETF (PXE) - Top rated oil exploration & production ETF
VanEck Oil Services ETF (OIH) - Top rated oil services ETF
WMB The Williams Cos Inc. (WMB) - Midstream key to backup renewable power
Energy Transfer LP Common Units (ET) - Pipelines from Permian to data centers
Kinder Morgan Inc. (KMI) - Pipelines from Permian to data centers

[dan_s]

I just saw a forecast for natural gas demand. 21 Bcfpd increase in demand by 2030, most of which is for LNG exports.
Only 2.5 Bcfpd increase for power generation looks way too low to me. To meet this demand growth, the Haynesville will need to increase supply by over 10 Bcfpd because it is the only basin with adequate pipeline access to ramp up that much.

[Finn352]

Utilities and many electricity infra companies have been rallying for quite some time, but of course the analyst upgrades and media attention are only starting to appear. Most of these cos are close to 52 week highs, which makes me reluctant to chase them but since most investors are trend followers they probably have further upside.
A couple of smaller promising names in electricity infra are POWL and STRL, and maybe GNRC.

Utilities have done better than oil & gas over the past 2 years, maybe because utilities had access to cheap gas. Hindsight is always great.
Still, I believe that the supply and demand balance for various raw materials (esp. energy and metals) is going in the right direction for us investors, just have to be patient. Of course it is annoying to be patient when meme stocks go up 100 % in a day..

I'm currently about 25% in uranium, 30 % in other metals, 25 % oil & gas, and the rest in electricity infra and a few small tech stocks.
Tankers have also done very well - thanks Fraser - but I've learned that I cannot constantly monitor all sectors of the market - and still sleep at night..