The artificial intelligence (AI) revolution is moving at breakneck speed, with capabilities doubling every nine months. This rapid advancement is fueled by massive investments from tech companies and governments around the world, creating a $15.7 trillion industry that has already minted 600,000 new millionaires. However, this booming sector faces a significant challenge: the insatiable energy appetite of AI.
Data centers supporting AI infrastructure are energy-hungry beasts, with Wells Fargo predicting a 550% surge in AI power demand by 2026. This means AI could soon consume as much energy as Japan, a country with a population of 125 million. To address this looming energy crisis, AI pioneer Sam Altman has called for an “energy breakthrough” to sustain the AI revolution.
The immense energy demand presents a unique opportunity for companies that can supply the necessary resources. Here are three stocks poised to benefit from the AI-driven energy boom:
AI Energy Breakthrough Stock #1: Kinder Morgan (KMI)
Goldman Sachs forecasts that AI energy needs will require the burning of 3.3 billion cubic feet of natural gas daily by 2030. This is excellent news for Kinder Morgan (KMI), one of the largest energy infrastructure companies in the U.S. KMI boasts a network of over 83,000 miles of pipelines and 143 terminals, with natural gas pipelines accounting for over 80% of its infrastructure. This strategic positioning makes KMI well-equipped to capitalize on the natural gas surge driven by the AI revolution.
The company’s strong position is already evident in its recent performance. Kinder Morgan raised its dividend this year, and analysts anticipate 25.9% growth in the next quarter.
AI Energy Breakthrough Stock #2: Pan American Silver (PAAS)
While not immediately apparent, silver plays a crucial role in the AI energy revolution. Silver is indispensable for the clean energy sector, which in turn helps meet the insatiable energy demands of AI. Every solar panel uses approximately 0.64 ounces of silver, while electric vehicles require twice as much silver, on average, compared to their fossil fuel counterparts. The growing demand for solar panels and electric vehicles, coupled with a global supply/demand gap for silver, creates a favorable environment for Pan American Silver.
Adding to the demand, the AI revolution requires silver for the semiconductors used in AI infrastructure. Pan American Silver owns the Escobal mine in Guatemala, one of the largest silver mines globally, holding reserves of 264 million ounces. This substantial reserve is enough to bridge the global supply/demand gap for over a year, potentially driving this $20 stock higher as the AI revolution increases silver prices. PAAS witnessed over 7% revenue growth last quarter and pays a 1.95 dividend yield, exceeding the S&P 500 average.
AI Energy Breakthrough Stock #3: Cameco Corp. (CCJ)
The AI energy shortage has even spurred bipartisan support for a previously controversial technology: nuclear power. The ADVANCE Act, passed in June, aims to expedite the approval process and construction of new nuclear reactors in the United States. The bill garnered overwhelming support in the U.S. Senate, passing with a vote of 88-2 and being signed into law shortly after. This legislative action is beneficial for Cameco Corp. (CCJ), a company with over 450 million pounds of proven and probable uranium reserves, a crucial component for generating electricity through nuclear power.
CCJ is already experiencing significant growth, with earnings surging by a remarkable 163% in the last quarter while simultaneously reducing operating costs. Analysts are projecting 73.3% growth for the company in the current year.
The AI energy crisis presents both a challenge and an opportunity. These three companies are well-positioned to benefit from the burgeoning demand for energy resources that power the AI revolution. Investors looking to capitalize on this emerging trend may want to consider adding these stocks to their portfolios.
