Editor's note: As regular readers know, power-hungry data centers are putting pressure on America's energy grid. Our friend Joel Litman – the founder and chief investment officer of our corporate affiliate Altimetry – is also paying attention to this trend...
Our friend Joel Litman – the founder and chief investment officer of our corporate affiliate Altimetry – is also paying attention to this trend...
Today, we're sharing an essay from him on the subject. It was published in the November 26 edition of the free Altimetry Daily Authority e-letter. And in it, Joel explains why the tech giants behind the AI infrastructure build-out can't afford to be picky when it comes to power...
Don't Ignore the 'All of the Above' AI Trade
By Joel Litman, chief investment officer, Altimetry
Big Dan Ingram was midway through his rush-hour set when everything went dark...
It was a crisp November evening in 1965. The veteran disc jockey was at New York City's WABC radio, queuing up hits to keep the city moving.
He'd just started spinning Jonathan King's "Everyone's Gone to the Moon" when something odd caught his ear.
The record sounded off. The music seemed slower than normal. It gave the sound a strange, unsettling tone, like a tape reel losing tension.
Ingram blamed the crew for running the turntable at the wrong speed. They insisted nothing was wrong. But the next song sounded off, too. Even Ingram's own voice was warped and distorted.
Then the lights in the studio flickered. As the studio dimmed, Ingram paused and remarked on air that it seemed like the electricity was "slowing down."
Moments later, the station went dark. And with it went all of New York City.
Ingram and millions of others were part of what was then the largest power failure in American history...
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Many of the world's top investors recently opened a new position in one tiny stock. Forensic accountant Joel Litman thinks they see the same thing that he predicts is coming. Namely, that this tiny stock nobody is paying attention to (with virtually zero coverage on Wall Street) is likely to double before the end of 2025... in as little as a single day. Get the full details here.
More than 30 million people were suddenly without power. Within 10 minutes of the failure, the lights went out across 80,000 square miles of the northeastern U.S. and Canada.
To make matters worse, the problem was nowhere near New York City. The outage happened hundreds of miles away... in Ontario.
It began as a routine trip of a protective relay in a Canadian hydroelectric station. But it set off a domino effect. A single power line dropped offline. That caused the electrical load to reroute through the remaining lines, overloading them in seconds.
Safety systems activated as they were designed to... disconnecting overloaded lines and isolating generators to prevent permanent damage.
But the very protections meant to preserve the grid also revealed its greatest weakness...
There were too many failure points. When one part fell, the rest couldn't absorb the shock.
Back in New York, the outage brought the subway to a halt. Air traffic controllers lost contact with planes en route to John F. Kennedy International Airport. The blackout took up to 13 hours to fully resolve.
In the aftermath, officials scrambled to understand how such a sprawling failure could have started with something so small. Their answer was simple, if not exactly comforting.
The system was too complex.
The grid had grown unwieldy. And the more it expanded, the more brittle it became.
That lesson is just as relevant today as it was 60 years ago... if not more so...
It's no secret that AI is putting pressure on our power grid. And it's true that the Trump administration is pushing traditional energy solutions like natural gas.
But considering the scale of today's energy demand, AI hyperscalers can't afford to be picky. We need an "all of the above" mindset to meet our energy goals.
The biggest names in tech understand this well. Facebook owner Meta Platforms (META), for example, recently signed a deal with utility company Entergy (ETR) that includes both natural gas power... and 1.5 gigawatts of solar.
AI leaders need every watt they can get. They're turning to options like renewables for plenty of that power.
The market should take note. The future of energy isn't limited to any one commodity. And neither is the future of energy investing.
Regards,
Joel Litman Editor's note: On Monday, at 10 a.m. Eastern time, Joel is going on camera for a special emergency briefing...
As he says, a massive convergence of catalysts just aligned. And it's all poised to hand you the chance to see the biggest, fastest investing gain you've likely seen all year.
In short, Joel says it's a way to potentially double your money or more – in a single day.
— According to the Chaikin Power Bar, Small Cap stocks remain somewhat more Bullish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Energy
+3.29%
Information Technology
+2.57%
Industrials
+1.45%
Financial
+1.34%
Consumer Discretionary
+1.34%
Communication
+1.16%
Materials
-0.47%
Consumer Staples
-0.58%
Real Estate
-1.13%
Health Care
-2.85%
Utilities
-2.86%
* * * *
Industry Focus
Homebuilders Services
5
22
8
Over the past 6 months, the Homebuilders subsector (XHB) has underperformed the S&P 500 by -2.71%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #19 of 21 subsectors and has moved down 6 slots over the past week.
Indicative Stocks
CARR
Carrier Global Corpo
CSL
Carlisle Companies I
FND
Floor & Decor Holdin
* * * *
Top Movers
Gainers
DG
+14.01%
GEV
+4.51%
DELL
+4.01%
Q
+3.96%
EME
+3.82%
Losers
INTC
-7.45%
LYB
-6.24%
ALB
-5.81%
LEN
-4.79%
KR
-4.62%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
Earnings Surprises
DG Dollar General Corporation
Q3
$1.28
Beat by $0.35
IOT Samsara Inc.
Q0
$0.15
Beat by $0.03
ULTA Ulta Beauty, Inc.
Q0
$5.14
Beat by $0.53
HPE Hewlett Packard Enterprise Company
Q4
$0.62
Beat by $0.04
COO The Cooper Companies, Inc.
Q4
$1.15
Beat by $0.04
* * * *
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