The rapid expansion of artificial intelligence (AI) is driving demand not just for software but also for critical infrastructure and natural resources. Tyler Rosenlicht, a senior vice-president at Cohen & Steers, argues that AI's growth hinges on a massive investment in physical assets like copper, pipelines, power plants, and labor. He believes the next decade will shift from an era of abundance to one of scarcity, creating new opportunities for investors.
Rosenlicht focuses on identifying bottlenecks where demand outstrips supply, particularly in sectors essential for AI infrastructure. He highlights nine companies that stand to benefit from this trend. Williams (WMB) owns key natural gas pipelines and is expanding into power generation for data centers. Tamboran Resources (TBN) holds natural gas resources in Australia but faces risks as it drills new wells to confirm its reserves. Black Hills (BKH) and Entergy (ETR) are utilities well-positioned to support data centers and industrial projects, with strong regulatory relationships.
MasTec (MTZ) provides skilled labor for building infrastructure, while SOLV Energy (MWH) specializes in utility-scale solar projects. Freeport-McMoRan (FCX) is a direct play on copper, a critical material for data centers and electrification. Perpetua Resources (PPTA) supplies critical minerals like gold, antimony, and tungsten, benefiting from efforts to secure domestic supply chains. Cameco (CCJ) mines uranium and supports nuclear facilities, offering steady power for data centers.
Rosenlicht acknowledges that these companies perform less glamorous work but stresses their vital role in the AI build-out. He believes supply constraints will drive up prices and create long-term investment opportunities.