AI and energy: where to invest and how to benefit?

Matt Sallee from Tortoise Capital anticipates a significant increase in electricity demand across the United States, predicting growth of 20 to 30% by the decade’s end, largely fuelled by advances in artificial intelligence. Sallee sees natural gas as the main beneficiary of this AI-driven trend, supported by robust LNG exports and rising power requirements from data centres. He points to three nuclear reactors coming back online in the longer term and highlights the complementary role of renewables but stresses natural gas will play a central part going forward.

Sallee identifies a strong value opportunity in US energy infrastructure, which he views as lagging compared to the surge in traditional AI-focused stocks. He highlights pipeline companies such as Williams (NYSE:WMB), supplying power to Meta’s (NASDAQ:META) data centres, and EQT Corporation (NYSE:EQT), the largest US natural gas producer, as key beneficiaries. He remarks that these businesses, traditionally tied to oil, are now working with hyperscale technology firms and operating on long-term, high-quality contracts. According to Sallee, the sector also trades at a 20% discount to its twenty-year average.

Other companies mentioned as benefiting from the AI infrastructure boom include Dell Technologies (NYSE:DELL), Modine Manufacturing (NYSE:MOD), and Arista Networks (NYSE:ANET), with bitcoin miners also pivoting towards energy provision for hyperscalers.