The AI revolution seems to be picking up steam, even as some market strategists, economists, and stock analysts ring the alarm bell over extended valuations and the risks of things ending with a crash. Undoubtedly, opinions vary quite widely on Wall Street, with some very smart people, including Jim Cramer, shooting down AI bubble fears, while others expect a repeat of the dot-com bust.
Whether or not AI is in a “rational bubble,” a “good bubble” (a term coined by Jeff Bezos), or a bad bubble, I do think that investors should play both sides of the coin. Perhaps the risk of AI-driven disruption (especially in the labor market) should capture more focus of investors than the red-hot bull market, which has made some investors nervous that we’re overdue for a dip. In any case, it seems like AI is moving full speed ahead, and betting against the move, I believe, could prove disastrous.
As the AI revolution continues moving along, there are some energy names that’ll need to pick things up to meet the unfathomable power demands brought forth by new data centers. And in this piece, we’ll look at just a few of the names powering the AI revolution that could win big as they power the AI revolution from behind the curtain.
GE Vernova
GE Vernova (NYSE:GEV) has been on an incredible run, gaining more than 350% in the past two years, thanks to its role in powering this AI revolution. The company’s latest and greatest gas turbines really do stand out as essential as firms look to do their part to equip power producers for the AI data center-driven electricity surge. Indeed, with the launch of powerful models, like OpenAI’s Sora 2, which is now featured on the viral Sora app, there’s potential for AI power demands to take things into overdrive.
Indeed, there’s no telling how much power next-generation AI offerings will draw. Either way, with new turbines, a huge order backlog, and a power grid planning platform, PlanOS, which could nudge power producers into the AI age, I think it’s tough to pass on the stock now that shares have come in a bit, now down close to 11% from all-time highs.
Sure, the valuation is a tad on the high side, and some analysts see limited upside from current levels. Either way, I think GE Vernova is a magnificent AI power play that many may overlook as they seek to bet on the AI revolution’s continued advance.
Oklo
Unless you’re an active pursuer of red-hot momentum stocks, you probably haven’t heard all too much about Oklo (NASDAQ:OKLO), a name that I praised over a year ago as a Sam Altman stock to watch amid the AI boom. Undoubtedly, the stock has taken off, soaring over 600% in a year and over 1,400% in two years.
The Altman-backed nuclear power innovator remains one of the most exciting ways to play the power side of the AI revolution. Still, investors are right to grow cautious as many speculators have already punched their ticket to one of the hottest momentum plays that’s becoming even harder to value.
With a wave of bullish and bearish analysts starting their coverage in the past couple of months, it’s hard to know what to do with shares. According to Canaccord Genuity, the firm is one of the “emerging” names in the “new wave of energy leaders.” I’m inclined to agree. But I would prefer waiting for a pullback rather than chasing a multi-bagger run. The stakes seem too high at this juncture, especially for investors who aren’t able to envision how the next 10-20 years will go for the firm. Either way, OKLO stands out as one of the more exciting stocks to watch closely as the firm reinvents the nuclear reactor.
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