There is only so much higher a $5 trillion stock can go.
Listen to the audio version of this article (generated by artificial intelligence).
Hello reader.
There is one simple problem with investing in a company like… Nvidia company (NVDA):
There’s only so much upside left for this $5 trillion stock.
- If shares double again, it would make Nvidia worth more than the Dutch East India Company.Volatile organic compounds), the most valuable company in history in inflation-adjusted dollars ($8 billion).
- If its value tripled, Nvidia would be worth more than all the stocks in the Japanese and UK stock markets combined ($12 billion).
- If it rose 10-fold, that would make Nvidia nearly as valuable as the entire U.S. stock market.
Like a goldfish in a bowl, each company is constrained by the economics in which it swims. No matter how successful Nvidia becomes, it’s still limited to just 8.3 billion potential customers… at least until they figure out how to sell AI chips to rabbits and mice.
Now, I absolutely think Nvidia is a great company. In fact, I recently did Comparing the most valuable company in the world to Babe RuthThe most famous baseball player in American history. Chip maker will Continue to make big gains, and there could be at least another 30% rally in stocks, especially after last week’s brutal sell-off.
But I think you can do better than that.
Thirty percent of the proceeds are Wall Street stakes… something you can earn using high-dividend stocks in three to four years, or by buying a house in the right zip code. In fact, my old Lexus appreciated 30% while sitting in my driveway in 2021.
That’s why I’ve built my career around finding 1,000% winners instead – exceptional stocks that can rise 10x or more. Most people only need to buy two or three of them throughout their career to make a life-changing amount of money. I found more than 40.
Last year, my focus was on chip makers like… Advanced Micro Devices Company (AMD) Data center companies such as Oracle Corporation (ORCL). These winners of the “second wave” of AI were still growing rapidly, even as Nvidia’s growth was plateauing.
Now that these stories have taken shape, I turn my attention to the third wave of AI companies: the “enablers.”
These much smaller companies provide the “picks and shovels” for building AI and are the new crop of stocks that could rise 10x.
these These are the companies I recommend now.
In fact, I recently added one to my main service, Fry investment report.
So, on the day Smart moneyI would like to tell you about this little-known energy company with amazing potential.
Next, I’ll share with you how you can find more Enabler companies with greater upside than Nvidia.
Let’s dive in…
The energy problem in artificial intelligence
We all know that electricity has become very expensive in America. The average family now pays nearly $2,000 annually in utility bills, or 2.5 times what it did in 2000.
This number is higher in less regulated states such as Massachusetts and Maryland, where private companies are free to set their own rates.
Now, we can’t blame energy costs. Henry Hub natural gas prices have only gone from $2.42 per unit in 2000 to $2.94 today…an increase of 21% in 26 years. (Again, my car did that and more in 12 months).
“Greedy” energy utilities aren’t to blame for the rise either… at least not entirely. For example, Massachusetts’ largest private company has had negative cash flow for nine of the past 10 years and is struggling to meet its dividend payments.
Instead, the real reason is that America doesn’t produce enough electricity.
Most coal-fired power plants in America were built 40 to 60 years ago, and they reached the end of their life all at once. Natural gas power has filled about two-thirds of this gap, but has reached its limit due to shortages of gas turbine and pipeline capacity. Offshore wind energy has proven to be very expensive. The Massachusetts utilities I talked about earlier have already lost $2.5 billion on their wind projects…and counting.
In fact, America’s electricity generation growth looks like a rounding error compared to growth in countries like China. The chart below tells the tale.
Now, the distress is made worse by artificial intelligence. Data centers already use about 5% of electricity in the United States, and they’re just getting started.
For example, the planned Stratos AI data center in Box Elder County, Utah, will need 9 gigawatts of electricity — more than double what the entire state currently uses. If estimates are correct, we will need 12 to 20 of these Stratos-sized projects by 2032 just to keep up with demand for AI.
That’s a lot of electricity.
To play this trend, long-time readers will know that I’ve selected several natural gas games, which outperform many “obvious” AI games like Nvidia’s.
But US data centers and utilities alike are now turning to another energy source to move forward…
The sun is shining too
Solar energy.
This intermittent source of electricity has become a surprisingly popular way to increase generating capacity. Solar panels are cheap, battery storage is viable, and the technology is supported by both sides of the political spectrum.
My home state of California still leads the country in installed solar capacity, but Texas, which ranks second, has almost caught up. Florida, Arizona and North Carolina are the next three.
In fact, 51% of additions to US power grids in 2026 are expected to come from solar, and another 28% from battery storage, according to the US Energy Information Administration (EIA). Most of it will occur in the South and Southeast.
Solar and battery storage will dominate new electricity additions this year.
Source: here
This creates a mine of Solar energy stockswhich it has It rose by 84% in the past year alone.
Solar energy is also surprisingly useful for AI data centers. Solar power output matches the 9-to-5 workloads of enterprise AI use (not to mention the extreme cooling requirements of AI data centers), and many government utilities now allow new data centers to “cut the line” for grid connections if they add solar and battery capacity. BloombergNEF estimates that battery storage could cut the timeline for data center connectivity by five years, an eternity in the AI arms race.
Now, there are many more awesome Solar companies out there. This industry is witnessing fierce competition after years of international price cuts, and Chinese-linked companies now control 80% to 90% of solar energy components.
Western companies such as canadian solar energy companyCSIQ) They must pay what their Chinese suppliers demand. We’ve already seen two major solar bankruptcies this year: SOLON Corp. And Freedom Forever. Ironically, the latter company is now under investigation by the state of Texas for fraud.
But I think I’ve found an innovative energy company that should do much better.
This company has developed battery storage technology that absorbs and smoothes violent fluctuations between the demands of an AI data center and solar generation. It solves a many-year problem that has plagued the data center industry.
For example, in July 2024, a small electrical disturbance in Northern Virginia’s Data Center Alley that lasted only a few milliseconds triggered emergency shutdowns that led to power outages. 1.5 GW of load from the grid at once – The equivalent of shutting down an entire medium-sized city. Power plants across Virginia and Maryland were ordered to reduce output to prevent a cascade of damage, and engineers were then forced to manually reconnect each data center to the grid.
This company helps prevent such violent fluctuations, making it easier for data centers to connect to the network. Growth is expected to rise.
Nvidia is a unique company. I’ve said it before and I’ll say it again. But great companies and great returns are two different things — especially when the company is already worth $5 trillion.
This goldfish has almost outgrown its bowl.
The energy company I described today is still swimming in open waters.
Revenue growth is expected to shift from negative 16% last year to positive 48% this year, then remain in the 20% range after that. It looks set to break even this year before profits start rolling in during fiscal 2027.
Its technology solves a problem that costs data centers billions. Its shares have yet to be discovered by investors still staring at Nvidia.
This is where the 1000% winners come from. Not one of the most famous fish in the aquarium, but one that no one has seen yet.
You can click here to learn how to access the name of the AI energy company.
It is considered,
Eric Fry
editor, Smart money
