In this week's Stansberry Investor Hour, Dan welcomes Stansberry Research's Director of Research Matt Weinschenk back to the show in a special crossover episode with Top Stocks. In this collaborative episode, the two discuss diesel, and Matt shakes things up by asking Dan most of the questions.

Matt and Dan kick things off by discussing the current state of diesel. The reserve diesel supply is now low enough that it's being measured in days instead of the usual months. The most recent report says that America only has 20 days' worth in reserve. This doesn't bode well for AI data centers since they cannot afford to have long downtimes, and at least 90% of their backup generators run on diesel. Another issue is that the fuel has a limited shelf life. If it's being stored, it can only last for so long, and if it's sitting in a generator, it has to be used or switched out so the generator isn't filled with gunk. And Dan says that even if global issues suddenly got better, diesel's current predicament wouldn't be resolved for a while...

I think people are really missing the fact that even if the war stops tomorrow, [it will take] six months to clear the mines in the Strait of Hormuz. That's another six months [to improve supply]... I saw one estimate. It's a very ballpark figure, but let's just use it – 10,000 wells shut down in the Middle East. And when you shut wells down real quick, it's [not like] you're turning the kitchen faucet off and back on. The chemistry keeps going and the geology keeps moving when you turn the man-made machines off... The bottom line is, things happen under the ground that result in the need for, at least in some cases, maybe $10,000 to $20,000 per well of fixes, maybe $1 million of rig work in some cases.

Next, the two explain how difficult it is to get a permit to build a new diesel refinery in the U.S., along with the pressure of building one near residential areas. Diesel costs around $100 per barrel and between $5.45 and $5.50 per gallon on average. Folks will adopt a "not in my backyard" mentality even if the price of diesel is higher. And even if the stakes are high enough, Matt says that no one is going to step up and compete with established oil and gas companies to build a new refinery...

The upfront costs are huge. And you're competing with existing facilities that are old, and there [are] not enough of them. But diesel is still not expensive enough, so to speak, for you to go, "Yeah, we'll build a new $5 billion facility and deal with the headaches and the incredible regulatory overhead to get that done and the risk that it might not even get built." No capitalist will make that decision.

Finally, Matt and Dan detail all the industries and segments that rely on diesel. And with data centers having high demand, in the event of a power outage, they'll pay to have top priority for the available supply. But despite the worry around the potential diesel shortages, there are ways that you can profit from it. Dan shares the names of several companies that he believes will continue to perform well and return value to shareholders. These are companies that he has recommended to his subscribers in the past during "buy the dip" scenarios, and he still recommends them. And Dan teases a new group of "Magnificent Seven" stocks that will serve the "hard asset" needs of AI...

I was looking into the AI trade, and it turned into an energy trade. Well, more broadly speaking, it's an atoms trade. So we've been building the digital economy, and we didn't want to build the atom economy, the physical economy. We wanted to shut down all those physical things, all the mines and the, you know, not even chip manufacturing, all kinds of hard-asset-type businesses. Well, we are hitting a wall with that. The AI build-out is going to continue. It is absolutely massive. And the real play, one of the really great plays right now that is unappreciated, is what we are calling the new "Mag Seven," [which] is actually going to be companies that are serving that need for those atoms, not just digital bits.

Click on the image below to watch the video interview with Matt right now. For the audio version, click "Listen" above.

(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Matt Weinschenk is the director of research for Stansberry Research. He also serves as the editor of Top Stocks, senior analyst for Dr. David "Doc" Eifrig's franchise of publications, and a member of the investment committee for Stansberry Portfolio Solutions.

At Stansberry, Matt works to find safe ways to grow capital with income-generating investments. His approach marries fundamental research and business quality with a quantitative understanding of the factors that drive stocks over both short- and long-term horizons. Before joining Stansberry in 2013, Matt provided research for The Oxford Club and was a founding analyst for the White Cap Report and Wall Street Daily – focusing on small-cap stocks and disruptive technologies.

Matt has been a Chartered Financial Analyst charterholder since 2014. He also holds bachelor's degrees in economics and political science from the University of Pittsburgh and a master's in applied economics from Johns Hopkins University.