🚨These AI Stocks Will Print Millionaires (You are investing in AI wrong)
Summary
Brian identifies a significant shift in the data center industry driven by new legislation requiring facilities to provide their own power rather than relying on the public grid. Brian explains that because natural gas plants can be constructed in one to three years, they are the only viable short-term solution compared to small nuclear reactors, which are not expected until 2030. Brian focuses on the companies that provide the essential hardware, fuel transport, and power management systems for these on-site plants.
Brian's thesis centers on the 'picks and shovels' of the AI energy build-out, emphasizing businesses with strong backlogs and pricing power. Brian highlights several key stocks in this sector:
Mentioned Stocks
Reasoning: Brian notes that Baker Hughes makes aero-derivative turbines which are faster to install for data centers needing immediate power. Brian states that Brian's data center power orders reached $1 billion in a single quarter, matching the entire previous year. Brian believes the stock is mispriced as an oil company and analysts see over 35% upside.
Reasoning: Brian mentions that Caterpillar is already up 60% and argues that the easy money has already been made in this crowded winner. Brian highlights that Michael Burry is shorting the stock as a reason to be cautious. Brian prefers looking for less noticed companies in the background of the data center build-out.
Reasoning: Brian views Eaton as a 'picks and shovels' play because every data center requires Brian's switchgear and breakers regardless of the power source. Brian notes that data center orders are up 240% in a single year and Brian highlights Brian's partnership with Nvidia on new 800-volt power systems. Brian cites analyst predictions of over 15% upside for the stock.
Reasoning: Brian points out that GE Vernova is one of the few Western companies capable of building large-scale gas turbines and Brian's order book is sold out through 2030. Brian argues this gives Brian significant pricing power, allowing Brian to charge 10-20% more per turbine. Brian also notes Brian's involvement in small nuclear reactors and an analyst-projected 20% upside.
Reasoning: Brian recommends Energy Transfer because Brian views Brian's 130,000 miles of pipelines as an irreplaceable network that data centers must plug into for fuel. Brian highlights the 7% dividend yield which is well-covered by cash flow and Brian notes that analysts see over 20% upside in the next year. Brian mentions that Brian already has contracts with Oracle and major campuses like Fermi.
Reasoning: Brian identifies Howmet as a critical choke point in the supply chain because Brian produces the specialized single-crystal casting blades that turbines require to operate at high temperatures. Brian explains that Brian's margins have climbed to nearly 26% due to this unique expertise. Brian mentions that analysts expect a 14% return over the next 12 months.
Reasoning: Brian highlights Cummins' power generation segment which builds large natural gas engines for microgrids, noting that Brian's data center revenue has doubled to $3.5 billion. Brian mentions that Brian's margins in this segment are nearly 30% and Brian's order book extends to 2028. Brian highlights that analysts give the stock about 20% upside.
Reasoning: Brian describes Williams Companies as a smart play because Brian is building and owning the actual power plants for data centers like Meta rather than just shipping gas. Brian notes that Brian has committed $5 billion to this strategy to capture higher margins. Brian mentions that analysts figure there is at least 15% more upside for the next year.
Reasoning: Brian states that EQT is the largest and lowest-cost natural gas producer in the US, making Brian a direct beneficiary of increased gas burn for data centers. Brian observes that EQT's stock is currently flat for the year and represents a 'torque' play on gas demand. Brian cites analyst projections of over 34% upside over the next 12 months.
Reasoning: Brian highlights this sponsor's protein product, Rejuvenate, which Brian states triggers muscle synthesis at only 5 calories. Brian notes that Brian's research-backed formula is entering thousands of CVS locations and the stock is at a historical low relative to the growth opportunity in the GLP-1 and aging markets.