{"id":47226,"date":"2026-05-21T18:13:13","date_gmt":"2026-05-21T18:13:13","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/47226\/"},"modified":"2026-05-21T18:13:13","modified_gmt":"2026-05-21T18:13:13","slug":"an-ai-trade-involving-energy-and-infrastructure-thats-doubled-your-money-topping-nvidia","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/47226\/","title":{"rendered":"An AI trade involving energy and infrastructure that’s doubled your money, topping Nvidia"},"content":{"rendered":"

(This is CNBC’s “Power Insider” newsletter, your inside look at the investments, people and companies powering the global energy industry. Click\u00a0here<\/a>\u00a0to subscribe.)<\/p>\n

POWER POINT<\/p>\n

What I’m hearing from energy insiders<\/p>\n

Oil prices are off their highs this week and media reports are citing Trump’s comments that Iran negotiations are in their “final stages.” But that’s not the real reason. The real catalyst is that ships are starting to move through the Strait of Hormuz. Crude prices started pulling back as soon as hedge funds started seeing<\/a> that traffic pick up, even before the Trump headlines hit.<\/p>\n

Sure enough, oil prices have ticked higher Thursday morning on more negative “headlines.” Just keep watching the strait traffic as your guide.<\/p>\n

Thankfully, that’s not my focus today.<\/p>\n

There’s so much more going on in the energy industry beyond Iran and investors can’t afford to be consumed by the barrage of headlines on the conflict and miss the other big money-making themes unfolding.<\/p>\n

In last week’s Power Insider,<\/a> I talked about the massive scale of A.I.’s electricity demand. (I’ll have another interesting trade idea on that lower in today’s edition.)<\/p>\n

Well…a few days later, I was on a plane to visit two huge liquefied natural gas (LNG) facilities in states near the forefront of the power story: Louisiana and Texas. About 48 hours after that, NextEra Energy (NEE)<\/a> rolled out a blockbuster deal to buy Virginia’s Dominion Energy (D)<\/a> and create America’s biggest utility.\u00a0<\/p>\n

Let’s start with the Dominion Deal.\u00a0\u00a0\u00a0<\/p>\n

NextEra shocked the energy world by announcing a mega-merger with Dominion<\/a>.\u00a0 The all-stock deal is worth about $67 billion, but the combined enterprise value of the new company will be about $420 billion – if the deal is approved.\u00a0 That’s a pretty good-sized ‘if,’ because some on Wall Street aren’t convinced this deal will be approved by regulators.\u00a0 The Jefferies team notes that NextEra “doesn’t have a great track record of approval” and they think the deal “could get rejected.”\u00a0 But Jefferies also notes that Dominion wasn’t “loved in Virginia” – its home state – and is probably pleased to have a potential buyer in NextEra.\u00a0\u00a0\u00a0<\/p>\n

Another energy insider I spoke with called the sale “surprising” and added that it will be a complex process to get this through multiple state approvals.\u00a0 He understands the NextEra side – the Florida company likely wants to grow its regulated utility base and can use the big recent stock gains to help cover the cost.\u00a0 But on the Dominion side, my insider calls it “perplexing” and notes that it might come down to a board frustrated by Virginia policies \u2026 and likely enticed by the promise of a big payout for its executives.<\/p>\n

Don’t undersell the scale of regulatory approval, says Evercore ISI. \u00a0 Analyst Nick Amicucci highlights that this potential merger will require approval from the Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory Commission (NRC), some combination of the FTC and DOJ, and all three of Dominion’s state commissions.\u00a0\u00a0<\/p>\n

What is clear is that NextEra and Dominion wouldn’t have entered into a deal if they and their high-priced lawyers had already thought of these hurdles.\u00a0 Less clear is the ultimate outcome of the proposed deal.<\/p>\n

Hot take \u2192 If you’re looking to make a trade on this, Jefferies says people are now likely to bid up both Duke Energy (DUK)<\/a> and Southern Company (SO)<\/a> as potentially “safer places” in the near-term.<\/p>\n

Hot take #2 \u2192 Deal or no deal, the lawyers on all sides of this transaction are going to get paid.\u00a0 Consider law school, kids!<\/p>\n

Now, to our inside look at the already huge – but still growing – world of liquefied natural gas.\u00a0<\/p>\n

In LNG, we had two big conversations.\u00a0 Actually, three if we’re being honest (and we always are).\u00a0 The first two were with the U.S. Secretary of Energy Chris Wright, the third with the Governor of Louisiana.\u00a0\u00a0<\/p>\n

We began the day before the sun came up, and spoke with Secretary Wright in Port Arthur, Texas.\u00a0 The interview was also a first-look inside Exxon Mobil’s huge new Golden Pass export facility.\u00a0\u00a0\u00a0<\/p>\n

Note \u2192 QatarEnergy is the primary owner of Golden Pass, and because its assets in the Middle East were struck by Iran, security is at a premium.\u00a0 We appreciate Exxon Mobil letting us in the gates<\/p>\n

In the morning interview<\/a>, Wright was bullish on China becoming a bigger buyer of U.S. crude oil. \u00a0 He also believes that America will soon have more oil coming out of Alaska, something my friend and colleague Morgan Brennan spoke with ConocoPhillips’ CEO Ryan Lance<\/a> about in Alaska on the same day.\u00a0 Friends, never let it be said that CNBC doesn’t go the distance for you.<\/p>\n

We then hopped in our rented VW Touareg and zipped about 60 miles east to Cameron, Louisiana and the energy-famous Calcasieu Pass.\u00a0 The Pass – or CP to the insiders – is the future home of Commonwealth LNG’s huge new export facility. \u00a0 We were there during the groundbreaking, about ten years in the making (see the Inside Line below for more).<\/p>\n

\"Energy<\/p>\n

We also had the honor to speak with<\/a> Louisiana’s enthusiastic Governor Jeff Landry.\u00a0 Landry is fired up about the possibilities he has around natural gas, LNG and AI. \u00a0 The Governor was proud to highlight that his state is powering America to the top of the ranks for LNG exports. \u00a0 But our main question was direct: does Louisiana have enough natural gas to power both the LNG export boom and fuel the electricity dreams of AI?\u00a0 Landry said the answer is yes.<\/p>\n

\"Louisiana<\/p>\n

WALL STREET’S TAKE \u2192\u00a0 What if oil and bond yields stay higher for longer?<\/p>\n

Power Insider is about energy, and so is the recent stock market. \u00a0 Energy stocks are up an average of 35% this year, more than double Information Tech, the next-best-performing group, which is up 16%.\u00a0 Though energy is still just a small portion of the overall stock market, investors in ETFs like the XLE, XOP, OIH have done very well.<\/p>\n

As oil keeps moving up, so do government borrowing costs.\u00a0 This week the 30-year U.S. Treasury hit 5.17%, its highest since just before the subprime crisis in 2007.\u00a0 Oil is a big part of the inflation story, so it’s also a major part of the bond market move.\u00a0 As oil moves higher, bond yields often follow.<\/p>\n

Zoom In IconArrows pointing outwards<\/p>\n

As Bespoke Investment Research notes, the CPI’s energy component has jumped to a 130% annualized pace in just two months.\u00a0 That’s the second-worst two-month spike in recent history, second only to the reaction after Hurricane Katrina in 2005.<\/p>\n

So what now?<\/p>\n

The ‘battle’ ahead is going to be between rising inflation risks and the super spending cycle from A.I.\u00a0 If the hundreds of billions in capital spending every few months around A.I. infrastructure holds up – and there is no indication that it won’t – it may trump higher energy and inflation risks in the market.\u00a0\u00a0<\/p>\n

Goldman Sachs says earnings are the key to stocks right now.\u00a0 The firm notes that the recent rally has “corresponded with surging near-term earnings estimates,” which are up 8% YTD.\u00a0 But don’t get complacent. \u00a0 Goldman also warns that we could have some medium-term weakness in stocks.\u00a0 The firm’s data shows that since 1980 there have been just 11 similar stock rallies.\u00a0 In those, markets historically move higher for a short time and then face “soft returns during the following few months.”\u00a0 In other words, it might be a flat – or even lower – summer.<\/p>\n

Evercore ISI’s Julien Emanuel appears more optimistic.\u00a0 The strategist has a year-end 7,750 target on the S&P 500 ..\u00a0 but he also shows off an ultra “bull case to 9,000.” \u00a0 Emanuel highlights that the “pandemic changed everything,” including how the market moves.\u00a0 He writes that the odds of what he calls “extreme outcomes” are higher on both ends.\u00a0 Emanuel recommends investors look to the options market, advising them to buy the SPY July 775C\/725P collar if near-term “unimaginable upside” is in both the bond market and oil prices.<\/p>\n

My take \u2192 Here’s an AI trade involving energy that’s doubled your money<\/p>\n

Speaking of the stock market.\u00a0 This would be a great RBI (random but interesting!) if we didn’t have another one for you this week.<\/p>\n

If you invested in a basket of the “AI giants” – the companies that are spending hundreds of billions to build out the data centers – you have done okay.\u00a0 An equal-weighted basket put you only up about 7% this year, but a much nicer 43% gain over the last 12 months. \u00a0 However, if instead you put the same money into a basket of companies that are building out AI infrastructure and energy sources, you’ve done much better.\u00a0<\/p>\n

In fact, over the last year you have literally doubled your money.\u00a0\u00a0\u00a0\u00a0<\/p>\n

Meta and Microsoft shares are actually lower over the past year. Nvidia appears stuck after earnings last night.<\/p>\n

But look at the infrastructure list. And yes, while TeraWulf (WULF)<\/a> has provided the bulk of the gains, data center builder Equinix (EQIX)<\/a>, engineering and power management company Eaton (ETN)<\/a>, and keeping-it-cool company Trane (TT)<\/a> have also done well.\u00a0 The investor money has shifted, at least for now.<\/p>\n

Zoom In IconArrows pointing outwards<\/p>\n

Take a look \u2192 Lately, the only thing moving through the Strait of Hormuz has been water. But there are early signs that tanker traffic may finally be starting to rebound. I break it down in this video:<\/p>\n

\"WillINSIDE LINE<\/p>\n

This week’s Inside Line is with Ben Dell, Managing Partner of big energy investment firm Kimmeridge and Executive Chair of Commonwealth LNG.\u00a0 Ben didn’t take the usual route to natural gas.\u00a0 He’s a graduate of St Peters College, Oxford.\u00a0 We asked him a few questions about his $10 billion dollar-plus new LNG export facility.\u00a0<\/p>\n

Zoom In IconArrows pointing outwardsZoom In IconArrows pointing outwardsRANDOM, BUT INTERESTING<\/p>\n

This week’s RBI gives it to you straight: The Strait of Hormuz is getting all the attention, but Asia’s little talked about Strait of Malacca<\/a> is actually the large oil and liquids transit point.\u00a0 JPMorgan commodity analysts lay it out nicely.<\/p>\n

Zoom In IconArrows pointing outwardsTHE GRIDChoose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"(This is CNBC’s “Power Insider” newsletter, your inside look at the investments, people and companies powering the global…\n","protected":false},"author":2,"featured_media":47227,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[26522,25509,24,25,1095,148,27946,28319,28322,1097,1066,28320,88,23411,369,5218,286,1111,146,9038,144,28321,28318,23408,9041],"class_list":["post-47226","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-lco26n","tag-ng26m","tag-ai","tag-artificial-intelligence","tag-breaking-news-markets","tag-business-news","tag-conocophillips","tag-dominion-energy-inc","tag-duke-energy-corp","tag-eaton-corporation-plc","tag-energy","tag-energy-select-sector-spdr-fund","tag-environment","tag-exxon-mobil-corp","tag-iran","tag-louisiana","tag-markets","tag-meta-platforms-inc","tag-microsoft-corp","tag-nextera-energy-inc","tag-nvidia-corp","tag-spdr-sp-oil-gas-exploration-production-etf","tag-terawulf-inc","tag-trane-technologies-plc","tag-williams-companies-inc"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/47226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=47226"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/47226\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/47227"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=47226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=47226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=47226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}