This energy sector is exploding in size… and you’re probably missing out

Today’s issue in preview:

• This energy sector is exploding in size… and you’re probably missing out

• The more AI data centers they build, the more these stocks go up

• The bull market critical resources just entered a profitable new phase. Are you long?

• Our track record goes from red hot to white hot: New highs and more shareholder wealth gains in our AI infrastructure picks, Power Grid Upgrade picks, Edge Computing picks, and Machine Sensory Perception picks.

The more AI data centers they build, the more these stocks go up

Credit: Smileus

Turns out, I was right about Engineering & Construction (E&C) stocks.

Spectacularly right.

On Monday, leading E&C firm and AI data center builder Sterling Infrastructure (STRL) reported blowout earnings. Revenue climbed 92%. Adjusted earnings increased 120%. Sterling’s E-Infrastructure Solutions, which includes data center projects, grew its backlog 74%, excluding a recent acquisition. The company now expects annual revenue to be around $3.7 billion – a target that far exceeds the average analyst estimate of $3.14 billion for the period.

In response, the stock soared 52% to reach an all-time high – a rare move for a large company. The company’s market value increased from $16.2 billion to $24.8 billion in a single day.

It was one of the biggest earnings-driven stock moves by a large company in recent memory. It also powered the Money & Megatrends E&C basket to new all-time highs and an incredible 76% year-to-date return.

E&C stocks have proven to be one of the true “home run” megatrend trades of the past two years… and they’ve become one of the world’s hottest industry groups.

In October 2024, I sent a note to colleagues that covered the bull case for E&C stocks. I described them as a vehicle for investing in the AI data center building boom.

E&C firms design and build giant infrastructure projects, such as electric power plants, data centers, transmission lines, factories, airports, and skyscrapers. Well-positioned firms in this space are enjoying soaring revenues thanks to Big Tech’s race to build AI data centers… a race that will see the likes of Google and Amazon invest a colossal $700+ billion this year.

E&C firms also have a “Donald Trump” kicker in the form of our president’s efforts to massively increase U.S. manufacturing capacity. This push will see trillions of dollars spent on building new factories and the power grids required to operate them. Apple (AAPL), for example, has committed to invest $600 billion in U.S.-based manufacturing over the next four years. Nvidia (NVDA) says it will invest $500 billion in U.S.-based manufacturing over the next four years.

So, let’s add this up.

The world’s richest, most powerful companies are spending money an epic scale. And they are moving as fast as they can. Plus, a forceful president has staked his legacy and reputation on expanding U.S. manufacturing capacity and winning the AI race.

Given the extreme urgency behind Big Tech’s AI data center buildout and Trump’s manufacturing push, the bidding process for many infrastructure builds consists of E&C companies throwing out absurdly high bids… then Big Tech or the White House replying, “Sure, we’ll take five of them. Can you start yesterday?”

That’s the bull case for E&C stocks. But regular readers know we care more about what the market thinks about a forecast than the forecast itself. In the case of E&C companies, the market enthusiastically approves.

Since my original note, I’ve followed up with over a dozen updates reiterating my recommendation. During this time, Argan (AGX) is up 459%. MasTec (MTZ) is up 238%. STRL is up 415%. Four members of our E&C basket are each up more than 100% in 2026… and the year isn’t even half over.

Both the AI data center buildout and the manufacturing capacity buildout are big, multi-year themes, which means well-positioned E&C stocks will likely continue their winning ways. Keep reading Money & Megatrends for the next big trade. There is always a bull market about to start somewhere.

This energy sector is exploding in size… and you’re probably missing out

Credit: tigerstrawberry

Over the past 10 trading sessions, the Invesco Solar ETF (TAN) has surged 11% and reached new all-time highs.

This upswing makes solar energy one of the world’s top-performing themes right now… and it makes our September 23 recommendation to own it a big winner.

The bull case for solar energy is simple: Given AI’s enormous promise, giants like Google, Meta, Microsoft, and OpenAI are spending trillions of dollars on data centers, AI chips, and other infrastructure components. It’s the largest collective investment effort of all-time.

All that AI infrastructure is becoming a massive new source of electricity demand and driving a bull market in almost all forms of electric power production. Goldman Sachs forecasts global data center power demand will surge 220% by 2030 compared to 2023 levels. U.S. data centers already account for 7% of U.S. electric power consumption, a figure that is expected to rise significantly.

Industry experts believe solar energy can’t compete with nuclear and fossil fuels to supply the enormous amounts of “always on, always there, baseload” power needed for AI data centers.

However, inexpensive and easily installed solar systems can supply smaller consumers, such as homes, offices, stores, and small factories. This means demand for solar power is increasing because AI is driving up the price of other forms of electricity.

The world installed a record 597 gigawatts (GW) of solar power in 2024 – a 33% surge over 2023. In the first six months of 2025 alone, the world added 380 gigawatts of new solar capacity – 64% higher than the same period in 2024, when 232 GW were installed. The rapid expansion of solar capacity has made it the fastest-growing source of new electricity generation. In 2024, global solar output rose by 28% (+469 TWh) compared to 2023, more than any other energy source.

China alone added 329 GW of solar capacity in 2024, accounting for 55% of global installations. India more than doubled its installations in 2024, with a 145% annual market increase – 30.7 GW added, up from 12.5 GW in 2023.

Driven by this building boom, many leading solar firms such as First Solar (FSLR),Sunrun (RUN), and Nextpower (NXT) are reporting 20%–35% annual top-line growth.

Right after I published my bullish note in September, solar stocks – as tracked by TAN – took off like a rocket, climbing 37% in five months. Then, TAN corrected and digested its gains. This week, TAN broke out of its consolidation area and registered a new one-year high. It’s a bull market in virtually every form of electric power production…. including the one that gets free fuel from the sun.

The bull market critical resources just entered a profitable new phase. Are you long?

Credit: erlucho

This morning, Rio Tinto (RIO), Teck Resources (TECK) and BHP (BHP) each surged more than 3% to reach new all-time highs.

These highs are a message that the bull market is critical resources is alive and well and full of opportunity.

Rio, Teck, and BHP are three of the world’s largest mining companies. Together, they are major producers of iron ore, coal, zinc, copper, aluminum, and lithium.

Over the past ten months, I’ve repeatedly made the case that we are in a favorable environment for such critical resource industries… one in which many individual resource sectors will generate large returns.

Critical resources are the building blocks of the economy. Think raw materials like crude oil, natural gas, iron ore, copper, corn, and cotton.

Even today’s high-tech world of AI, apps, email, and Zoom calls is built on a “low-tech” foundation of steel, concrete, copper, lumber, and aluminum. Every day, our cars, trucks, and airplanes consume millions of barrels of fuel. Our lights turn on because we burn coal and natural gas.

Mining, extracting, planting, harvesting, processing, refining, and transporting critical vital resources is a multi-trillion-dollar business that affects every area of your life.

Given their size, scope, and trading liquidity, BHP, Rio, and Teck are “go-to” choices for large money managers looking to take positions in critical resources.

If you prefer ETFs, the strength in the three companies above is driving the iShares MSCI Global Metals & Mining Producers ETF (PICK) – a fund comprised of many large miners – to new one-year highs.

These companies are on the right side of the AI-driven “K-shaped stock market.” Much of their output is in high demand for high-tech products and infrastructure. Plus, you can stub your toe on what they produce. As great as AI is, it cannot code a large copper mine or a pallet of aluminum ingots into existence.

Right now, gold and silver are in bull markets. Uranium and uranium stocks are in a bull market. Copper is in a bull market. Coal stocks are in a bull market. And three of the world’s largest mining companies just reached new all-time highs.

After a critical resource industry hits one-year highs, it’s reasonable to ask if the good times in that industry are over. To this, I’ll remind you of something I’ve said many times in Money & Megatrends: When a critical resource market trends, that trend tends to last for years.

This is because major shifts in resource supply and demand play out over years, not months. If the world decides it wants a new copper mine, it will not get that mine for a decade. You cannot print or code a copper mine into existence. This means many commodity market trends are glacier-like and play out over 5 – 10 years.

With this in mind, I’m still long critical resources.

Market Notes

• Our recommendation to ignore the AI bears and stay long the AI boom continues to pay off. Leading computer memory makers Seagate (STX), Western Digital (WDC) and Micron (MU) reached new all-time highs today. Semiconductor manufacturing giants Taiwan Semiconductor (TSM) and Intel (INTL) reached a new all-time highs.

• Our 31st March recommendation to own Marvell (MRVL) is still paying off well. It just reached a new yearly high and is now up 87% YTD.

• Our recommendation to own machine sensory perception stocks continues to pay off. Industry leaders Sensata (ST) and Cognex (CGNX) reached new one-year highs today.

• Our October 7th recommendation to own power grid stocks continues to pay off. Surging spending on data centers and power infrastructure sent power grid upgrade firms nVent (NVT) and Valmont (VMI) to new highs.

• Our 5th May recommendation to own Hut 8 Mining Corp. (HUT) is already up 33% after a stellar earnings report.

• Our February 19th recommendation to own One Stop Systems (OSS) to play the Edge Computing boom has been a big winner. OSS surged 55% today after reporting strong earnings. The stock is up a massive 84% since our note.

Regards,

Brian Hunt
Editor, Money & Megatrends

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