AI's Power Grab Is Ahead of Schedule
The energy surge you can't ignore... Data-center demand is skyrocketing... Why natural gas is the answer right now... Own the infrastructure... Tips for navigating the AI disruption...
AI is using more energy than you might think...
Over the past few weeks, we've taken a closer look at the AI story – from bubble concerns... to the "SaaSpocalypse"... to worries about AI replacing an unknown number of jobs.
Today, we're looking at the infrastructure needed for the whole story to continue – data centers and the energy to power them.
When OpenAI's ChatGPT launched the AI boom back in November 2022, data centers only made up about 4% of total power demand in the U.S.
But since then, their energy share has increased substantially – hitting 7%, according to analysts at Goldman Sachs.
The trend will only continue from here.
At the end of 2024, the Department of Energy projected that data centers could make up anywhere from 6.7% to 12% of total power demand by 2028.
Here we are, only about a year after that projection, and data centers in the U.S. are already in that range – two years sooner than expected. And those are just the headline numbers.
The story is even more pronounced in parts of the country with high data-center concentration, like "data-center alley" in northern Virginia, where these digital hubs made up 26% of all power demand in the region in 2023.
There's also a backlog for new data centers waiting to go on line...
In a post on social media platform X, user Lukas Ekwueme shared the following chart based on recent survey data. As you can see, it shows big tech companies (the green dots) believe that their data centers can get access to the grid next year. But utility companies (blue) are less optimistic.
The average difference between what hyperscalers are hoping for and what utilities can deliver is just about a year.
But in places like Texas and Ohio, utility companies are less optimistic. They don't think they can get new data centers power for two years or more.
Energy companies' earnings are telling the same demand story...
Yesterday, natural gas giant EQT (EQT) released its quarterly earnings results.
EQT produces natural gas and delivers it across states like Pennsylvania, Ohio, and West Virginia.
In its earnings presentation, EQT noted that over the past 11 years, demand for gas-fired power "only" grew by about 14 billion cubic feet per day (bcf/d). But over the next five years, data centers will account for 10 bcf/d of power demand. And they could account for as much as 18 bcf/d.
In other words, data centers alone will call for the same amount of new power demand we saw in total over the past 11 years.
Natural gas is the obvious solution in the short term...
We've written a lot about nuclear energy in previous Digests. While the energy source is seeing tons of investment from Big Tech and the government, those plants will be under construction for years, let alone up and running.
As Commodity Supercycles editor Whitney Tilson and his team explained in their January issue, there's only one energy source ready now to meet increased demand: natural gas. It's the most reliable source to create electricity at scale.
As they wrote...
There's no way to provide electricity to all these new data centers without building more power plants. And while solar, wind, and nuclear are working to make up some of that demand – and nuclear in particular is set to provide more power in the future – natural gas is the world's cleanest, most reliable energy source right now.
And much-needed natural gas capacity is already on the way...
Pipeline company Energy Transfer (ET), which runs natural gas pipelines throughout Texas, the Midwest, and the southwest, also reported its earnings yesterday.
The company said it has started supplying one of Oracle's (ORCL) data centers with natural gas, as part of a deal to supply three Oracle data centers with up to 900 million cubic feet of natural gas per day. That's enough to power at least 3.5 million American homes.
Energy Transfer has also increased the capacity of one of its pipelines in the southwest – from 42 inches wide to 48 inches. This will help it provide more natural gas faster to Arizona and New Mexico.
Arizona is a growing market for data centers. According to the data-center-project tracker Cleanview, Arizona has 23 operational data centers, with another 29 planned. Those 29 planned data centers would increase the state's computing capacity sixfold – and bring a lot more demand for power.
As for EQT, it has a stake in the Mountain Valley Pipeline ("MVP"), which transports natural gas from West Virginia to data-center-heavy northern Virginia. Owners of the MVP applied for a "boost" in October to increase capacity by 20% to meet growing demand.
In short, as the Commodity Supercycles team concluded in last month's issue, "with natural gas in such high demand, it's a great time to own companies in the space." All of the natural gas companies in their model portfolio are still in buy range today.
Existing Commodity Supercycles subscribers and Stansberry Alliance members can find the natural gas stocks and other companies set to benefit from data centers' need for more power right here.
Speaking of AI, if you're not sure how to navigate its disruption in the market...
Here's a good place to start...
Today, our colleague Mike Barrett published a simple, effective framework for gauging the impacts of AI on your portfolio. In his weekly Select Value Opportunities update, Mike returned to his discussion of the "SaaSpocalypse" from two weeks ago, and wrote...
The rise of AI technology is introducing a new dynamic we must adapt to... The market has splintered. And it's helpful for us to place stocks in one of three categories...
Category 1: AI Winners (These stocks directly benefit from rising AI demand.)
Category 2: AI-Resistant Stocks (These stocks are unaffected by AI.)
Category 3: AI Victims (These stocks are at risk of disintermediation from AI.)There's a lot of uncertainty around future revenue growth and the profitability of perceived AI victims. So investors are unloading them. They're redeploying their capital into AI winners and those immune to AI's impacts.
As UBS analyst Michael Brown recently noted, "We're in this moment where we don't really know what the next 12 months or 24 months [will bring for] companies [at risk from AI]."
The bottom line is, we want to own stocks that benefit from AI (Category 1), as well as AI-resistant stocks (Category 2). We also want to avoid stocks that have a high risk of being displaced by AI (Category 3).
Mike also assessed the recommendations in the Select Value Opportunities model portfolio. He considers three to be AI Winners, including one company you might not think about benefiting from the rise of data centers.
Seven other recommendations in the portfolio are "resistant," meaning they are "companies that provide products and services that AI simply can't replace," Mike wrote. And none are victims, which is excellent news if AI fears continue to rise in the market.
Select Value Opportunities subscribers and Stansberry Alliance members can read Mike's full issue here... and you may want to think about running this exercise on your own portfolio holdings.
Given our subject today...
We'd be remiss not to mention the free presentation our friend Marc Chaikin, founder of our corporate affiliate Chaikin Analytics, debuted yesterday.
During the presentation, Marc unveiled a powerful new tool that he says can spot which AI stocks could double or triple your money this year. The trick is identifying the biggest earnings beats... before they occur.
Marc's work at Chaikin Analytics is built on data and powered by technology that can help individual investors see where money is flowing on Wall Street and which sectors and businesses have trends in their favor.
As Marc explains, AI breakthroughs "are only getting better... with the underlying technology doubling in power every six months now." But he's anticipating a "tug of war" in the market starting later this month.
So it's not just about owning the right AI stocks. You also need to avoid the losers to protect your portfolio from painful losses. Marc says...
I'm not predicting a prolonged crash.
But what's coming next could be just as dangerous for your portfolio... in a way only the most sophisticated investors are likely to foresee. That's why I rushed to hold this event today.
In Marc's free presentation, you'll hear his top stock to buy right now... a business that is harnessing AI to transform health care... and his colleague Joe Austin's recommendation of a "double bearish" stock to stay away from immediately.
Click here to watch or read a transcript of Marc's full event right now.
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In today's mailbag, more feedback on our annual Report Card from our Director of Research and Publisher Matt Weinschenk... thoughts about AI... and a reply to a note in yesterday's mail... What's on your mind? As always, e-mail us at feedback@stansberryresearch.com.
"Good morning Matt, Thank you for completing the [Report Card] for Stansberry Research segments. Improvements come from honest information and Porter Stansberry has always provided that going into recommendations and the resulting yearly evaluations. Your grades and the analysis are essential for me to make sense of the changes in the investing/trading market.
"More than anything, the yearly grades have kept me focused on the instruments that most closely meet my needs, versus the variety of investments that are available. Building the focus wasn't immediate but feedback made it deliberate over the years I have been a subscriber. I have become comfortably retired versus being an anxious, impulsive, and gullible individual. Your information equaled security given my limited earned income in the 'helping profession'. (Somehow the commitment to help others translated into an expectation of being willing to work almost for free.) I am grateful and thankful for what Stansberry Research has provided." – Subscriber Steve B.
"Greetings, The messaging coming from these AI companies is wreaking havoc in the market. Yesterday, I caught a headline that read that 99% of software companies would be eliminated. The CEO of Anthropic supposedly said that unemployment could rise as much as 10-20% (quite a wide range and irresponsible comment) while the product promotion guy that you included in the Digest email [yesterday] seemed to say a somewhat different message.
"These AI companies are creating advanced technology which combined with robotics is wreaking havoc in multiple sectors beyond just the software sector... Corporations [are] reacting with mass layoffs or hiring freezes. The entire AI and robotics sector needs to coordinate with our government leaders and hold multiple town hall type meetings on all the major media outlets to inform the public about a planned implementation of these technologies and how they are impacting our country and the corporate sector..." – Subscriber Rodger G.
"Corey and Nick, In response to reader Larry N. and his experiences with Silver, IMO it's just as hard to know when to sell as it is to know when to buy. Thanks for the articles!" – Subscriber Michael U.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
February 18, 2026