The following content is sponsored by Monument Traders Alliance and written by Karim Rahemtulla, the head fundamental tactician at Monument Traders Alliance.
Let’s be clear: Donald Trump isn’t known for backing individual companies.
But if you know anything about him, you’d realize he’s an “America First” protectionist at heart.
And the truth is, Trump’s latest trade war means he’ll need to protect American companies from costly tariffs. And there’s one emerging energy company he’s backing personally.
It didn’t take long for me to understand why.
You see, this energy group is tapping into two of the most important forces shaping Trump’s “America First” future.
Those forces are:
- Domestic energy independence
- The rise of artificial intelligence
Over the past few years, the hype surrounding artificial intelligence has been everywhere.
Tech stocks like NVIDIA have become a household name. ChatGPT is changing the way we gather and communicate information.
Plus, America is in an arms race with China, with former President Joe Biden signing the CHIPS act in 2022 to boost domestic tech production from companies like Intel and Micron.
But aside from AI, there’s another side to the story – energy.
While AI is growing at a rapid rate, it’s starving for energy.
A single AI model can consume as much electricity as 100 U.S. homes during its training phase – and it’s only going to get worse.
Even Elon Musk has raised alarm as well – saying we’re headed for a massive shortfall in electricity production if we don’t act fast.
It’s rare that two major market forces combine, but this is one of those pivotal moments.
On one hand, you’ve got AI – the single biggest transformative technology of our lifetime. On the other hand, you’ve got energy – the main resource to fuel that transformation.
Combine the two and you have a complete system for:
- Predictive maintenance: AI analyzing sensor data to predict equipment failures before they happen, reducing downtime and saving millions
- Production optimization: Use real-time analytics to help increase yield by adjusting parameters on the fly
- Material efficiency: Software helping to reduce waste by improving how raw materials are deployed
- Speed to market: Faster decision-making and better data means you can ramp up production faster than your competitors
When I was researching the company, I was shocked at how strong its fundamentals were:
- It’s sitting on massive energy assets.
- It’s a cash machine.
- It’s undervalued by every metric.
- It’s growing in an emerging sector (both AI + energy).
- It pays a massive dividend.
- It has smart money buying in (Vanguard owns 48 million shares, and BlackRock owns 32 million shares).
Here are a few reasons why the energy group is not a household name yet.
It’s in a “boring” sector.
Wall Street and retail investors have been obsessed with tech and AI over the past few years.
Meanwhile, energy prices have been ignored unless prices spike.
Energy companies aren’t sexy like Nvidia or Tesla. So, it’s overlooked because of its sector.
COVID caused some impairments.
It took some write-downs and impairments in previous years, especially during COVID when demand cratered. While the company is crushing it now, those past scars have scared investor sentiment.
It recently partnered with an AI company.
This company recently partnered with another tech giant to squeeze more energy out of the ground, and more profitably and efficiently. But that partnership is still in its early stages, and investors haven’t caught on yet.
When a President starts defending a company in the headlines, it means something big is brewing.
And when a foreign government recently tried to pass a new tax to interfere with the group’s operations overseas, Trump stepped in with a fiery statement – directly calling out the move and telling them to reverse course.
The fundamentals on this company are also the strongest I’ve seen in years, and since most investors haven’t caught on yet, I believe it’s still undervalued right now.
Read the full article here