Oil Just Hit $95. Get READY For What Comes Next.

[00:00:00]From unprecedented AI energy demands to the  continuing conflict in Iran, energy is one of the highest demand sectors in the entire market. And  these four stocks are cashing in on that demand.

[00:00:12]Joining us today are Dan Ferris from Stanbury  Research and Luke Lango with Investor Place. Guys, such a treat to have both of you on today to  really talk about these two major catalysts for the energy sector. Dan, I know your specialty  is the conflict in Iran and oil prices. And Luke, you are going to dive into that AI energy demand  a little deeper. We'll get to the AI story in a minute, but Dan, let's start with you to this  ongoing, continually reigniting conflict in Iran.

[00:00:37]Let's talk about what that's doing to the energy  sector. I don't think the Iran war is a sort of quick hit and it's done and then we're all back  to normal and oil prices will go back down and everything will be fine. On the contrary, 1 or  2% of global oil production could be permanently offline. We we don't really know, but I think  some amount will be permanently offline and a lot of it is damaged and won't be started up. Then  there's just the fact that, you know, the US and Israel have bombed the heck out of the place. So,  refiners have been bombed. Um, you know, we've all read about this stuff. The helium supply, the  fertilizer supply, the liquid natural gas supply, it's all been bombed, you know, to some degree or  another. And never mind the difficulty of getting anything through the straight hormuz. It continues  to get worse. And I think even if the war stopped tomorrow and there were peace and hormuz opened  and Bob Elandu opened and all the rest of it, you would still have a substantial impact to energy  and global commodities. At this moment, Bridget, it's gone on longer than anyone thought. Right.  The market was pricing in peace and now we're oh, now we're back into the mid 80s with crude oil.  So that's the way I see it. I think it's a higher for longer situation with energy prices. Yeah.  Right. Not only has this war gone on much longer than anticipated, keeping oil prices higher for  even longer, but that is all coming at the same time the US and really the entire world is facing  this unprecedented demand for energy to power the AI story. There's so much demand for electricity  and really power of any kind for the AI buildout.

[00:02:13]So Luke, we've covered that Iran conflict catalyst  for the energy sector. Let's dive a little bit deeper into the AI perspective and what it's  doing to the energy sector. We were unprepared for this moment as a as an economy. We basically  spent the last 30 to 40 years definitely since the dawn of of the internet, but arguably before  that convincing ourselves that we are a digital services economy. And so we invested everything  and told all of our I mean my whole generation was told become coders and you're going to be set for  life. And now the coders are all getting fired.

[00:02:44]We were woefully unprepared for this moment. We  we convinced ourselves we're a digital services economy. We invested in digital services. We built  digital services businesses. We told people to be digital service employees. It was all digital,  right? We didn't need the physical. It was laughed at to be a plumber. It was laughed at to be uh in  construction. It was laugh like that. That was the uncool stuff. That's what the uneducated people  did. That's not what you know. So all of a sudden we're in this moment where we need a lot of  physical stuff and we were so unprepared for it.

[00:03:10]right now we're having plumbers and and  construction electrician people that are making $300 $400,000 a year and we have unemployed people  out of Harvard uh with coding degrees that don't know where they're going to end up. And so as a  society we were so unprepared for this moment. And that's why you have these massive supply demand  imbalances. And of course if you are on the supply side of that then you're going to make a lot of  money because you're going to be sold out. You're going to be able to uh sell whatever prices you  want high margins, high profits, high cash flows.

[00:03:34]And so that's why when we look at you know you  want to be aligned with the capex takers. Well, which capex taker specifically the hard asset  ones? Because as a society, as an economy, as a civilization, we were just woefully unprepared for  this moment where we need a lot of physical stuff.

[00:03:49]And we essentially underinvested in physical stuff  for 30 to 40 years. And now we have to overinvest for the next several years, probably up to up to  a decade to compensate for that. Yeah. And we're absolutely seeing that in the market. all of those  hard assets, the ones that are actually physically doing the building of this new AI infrastructure  are the ones that are truly winning in the market right now. We are going to get into four of  these names right now that are really good hard asset opportunities for investors. I know it's  also something that the two of you dove into in this special report, really talking about where  the money is flowing for that next 5 to 10 year period and where you're going to continue to see  a lot of growth. If you want to check out that special report from Dan and Luke, scan the QR code  or click the link in the description to get that special offer and learn more about the different  stocks they're recommending that are specifically on this strategy of looking where that money is  flowing right now and will continue to flow for the next several years. There's also some really  big players that are already flowing their money there. And so following the money is such a good  strategy, too. That's all in their special report you can get with that link. All right, guys.  We have a list today of four different stocks we're going to cover. The first is a group of two  stocks. So, let's get right into this list. Dan, what is the first group of stocks that you're  sharing today? The refiners, Valero and Marathon.

[00:05:06]Valero is VLOO. Marathon is MPC. And they both  have about 3 million barrels a day capacity. But the important thing here is that you really can't  build a refiner in the United States anymore, including the America First refinery that is  purported to to be uh underway in Brownsville, Texas. It's my view that they'll never build it.  They've been trying to build a pipeline on that site since 2016, and they can't even do that. They  couldn't build a pipeline and a terminal um and storage there, let alone a refinery. You can't.  You can permit a refinery in the US. You can't build one. So, I want people to own refineries and  and the at this moment, of course, they're gushing cash flow that they won't be able to invest in  building a new refinery, so they're going to buy back shares and pay dividends. I'm convinced  that the money will not go into new investment.

[00:05:56]It will go into shareholders pockets. You know,  that's the basic sort of a top- down case for the refiners. They've soared 80% since the beginning  of the year and and it looks like, woo boy, I missed it. No, I don't think you did actually.  Yeah, that was going to be my big question is the concern for for investors. I know a lot of our  viewers whenever they see a stock that's towards the top end of its 52- week range, they've seen a  stock that's gone up 90% year to date, they say, "Why would I get in now?" Uh talk about what  you think about the long-term growth here and how much more growth could be to come. I also  think you look at the earnings reports for both of these stocks. Clearly, the money is coming.  It's not growth that I'm looking for, although there will be probably on-site capacity expansions  because they can do it. They have the they have the sights. But what I'm saying is they'll gush  so much cash that can't be invested anywhere.

[00:06:46]They'll have to pay it out to shareholders. Their  share counts will have to shrink. Dividends will have to go up if they want to do it that way.  You know, it's like this gushing cash cow trade that will be more persistent than I [laughter]  think anybody is really anybody looks at says, "Oh, it's up 80 90%. I too late." I don't think  so. An interesting thesis for this one or for both of these names. Just the fact that they have  so much cash and nowhere to reinvest it. If I've learned anything about them over the years, if  you can't point to some way in which the supply is seriously crimped amidst ongoing demand and  gasoline demand has fallen slightly since 2019, diesel demand continues to rise. That's  another thing I found these things because I was looking at the fact that we have I mean  there are different numbers on this too between actually as low as 3,000 as much as 5,400 data  centers in the country. 95% of them use diesel generators. I mean, these are massive like 2  megawatt diesel generators and they have like a dozen or two of them on site. And they're doing  the same thing with gas turbines. You like they're hauling them into these places. So, there's this  baseline of demand because diesel fuel goes bad every 6 or 12 months and you got to replace  it and you got to run the diesel generator for so many hours per month or else the the fuel will  kind of foul it up. There's a kind of a tail risk insurance aspect to it as well. Yeah, I think the  AI story and that the energy demand is absolutely there. We we know that diesel and oil also plays  a role in fulfilling that need for electricity that the AI demand is bringing so much right now.  Luke, that kind of transitions well into the stock that you have for this list today of those real  kind of picks and shovels, boots on the grounds companies that are doing a lot of work tied to  this AI buildout. What's the stock that you're talking about today, Luke? Yeah. So, first I just  want to say you you mentioned that thing about uh you know your readers or viewers writing in  and saying don't want to buy a stock at a 52- week high. Well, the most likely thing a stock  does after making a new high is is make another new high. Uh you know momentum is very real and in  this market it is very very real. So I'm actually giving a recommendation here that is a stock that  has run to 52- week highs. It's been making 52- week highs at the 52 week highs for a very long  time and will keep on doing so for the next 6 to 12 months I think if not a little bit longer.  And that is G Vernova. Ticker is GEV. So G Vernova essentially makes the physical energy equipment,  you could call it, stuff like gas turbines, transformers, grid gear that turns electricity  into something that a data center can actually use. So essentially like that transmission if you  will. Um AI, you know, the bold thesis obviously for foot view. AI needs way more power than  anyone planned for. Uh and which we were woefully unprepared for. As I mentioned earlier, the grid  cannot build fast enough. So, tech companies and utilities are buying this equipment, these  turbines and transformers and grid gear, etc. as fast as IOA um can make it. And the numbers here  are are pretty outstanding. If I just kind of pull up their recent earnings report, they do report  earnings very soon, but their most recent earnings report was just outstanding where we saw uh their  electrification segment booked $2.4 4 billion in equipment orders in Q1. That is more than they  booked all of last year. So, they're doing more data center business and electrification in  one quarter than they did all of last year. The electrical equipment business posted 86% organic  year-over-year order growth in Q1. The backlog rose from 25 billion a year ago to 42.4 billion  in that quarter. Overall backlog rose from 116 billion to 163 billion. uh $18.3 billion in new  orders in the quarter, which is a 71% uh increase year-over-year. It's more than just story here.  There's massive numbers to to back it up. And again, I think that this infrastructure buildout  continues. Power to me is the ultimate bottleneck and G Vernova solves a very important uh problem  in that power specific bottleneck of the AMA buildout. So, I think the stock is is going to  continue to do well, be fundamentally supported by really strong uh revenue growth, margin expansion,  and ultimately earnings growth. The chart's really pretty. It just keeps on moving up and to the  right. Had a little bit of a 10 15% pullback and immediately recorrected and is back to to new  highs essentially or very close to. This is a buy on dip stock, you know, so long as the buildout  continues, which again, I think it will continue for at least the next 6 to 12 months, if not  longer than that. I love that idea. I love it. One of the reasons I love it is because there's three  of these companies in the world control twothirds of all the turbines. GE, Mitsubishi, and Zemens.  And what you know, it probably takes a little more than 5 minutes to build a new plant to build, you  know, natural gas like utility scale natural gas turbines. And it takes a lot of capital and a lot  of time and and a lot of materials. It's what Luke said before. We haven't built stuff for a long  long time. Yeah. And this one, like you said, Luke, has been such a strong performer for for  a very long time and continues to grow and grow and reach new highs. Again, for investors who are  looking for a stock that's not at those new highs, wait around for this last one. We have one that  the chart looks a little bit different, is a much smaller company that we're getting to or the  third stock on this list today. But Luke, a couple follow-up questions about what kind of growth  investors can expect from a stock like this during this kind of intense AI infrastructure buildout  spending that we're seeing right now. Every retail investor wants to find that stock that's going to  go up a,000% in a year, whether that's the memory or some different energy. We've seen Bloom Energy  go crazy this year. Is that what we're going to see with GE Vernova or what kind of growth can  you expect not just in the next 18 months, but the next 5 years for this company? It's on a sand disk  or micron type story where you're gonna get a 100 or 200% or 500% revenue growth or like a Nebius  where you just get those massive triple digit revenue growth numbers, this huge margin expansion  and these sometimes thousand% plus EPS growth numbers. Genova is not that. And that's actually  kind of a good thing. It's a feature, not a bug, right? Because when you have a stock like Micron  or SanDisk or a Bloom Energy that goes up like that, they also go down a bunch too sometimes. And  we've seen that recently, right? I think Micron had a 25 or 30% haircut recently, if not bigger.  SanDisk, I think, was even larger than that.

[00:12:57]They're high-risisk, high reward plays. G Vernova  is a bit more lower reward, but also a lot lower risk. Like, this stock tends to bottom after 10 to  15% pullbacks. It doesn't have 20% bare markets.

[00:13:08]It doesn't have these 40% crashes that you can  sometimes get with some of those higher uh higher beta names. This is a company that when you look  at its revenue growth numbers, it's probably over the next several years, I mean, we're modeling for  like mid- teens to high teens revenue growth. So 15 16 17% per year. That's really really solid.  We think margins can continue to expand. They're around low 20s right now on gross margins. I think  that can get up to to high 20s if not low30s. Uh margins should expand with those gross margins and  with economies of scale. When you have a a high team's revenue grower that's going to expand Ebid  margins from, let's say, 8 9% to 20 22 24%. You're looking at, you know, maybe a 30 to 40% Ebida dog  grower, which is massive IBIT growth. So that's 30 to 40% returns per year if the multiple stays  consistent. The multiple on this one is 35 1.5 times Ford Ebatawa, which is a little rich. So  maybe that compresses a little bit. But I think this is a name that can get you 20 to 30% returns  per year compounded so long as this boom persists with kind of lower volatility attached to it.  You're not going to be subject to those 20% 30% draw down that some of the other names give you.  And so it's a nice complement to an AI portfolio.

[00:14:18]It's one of the reasons we like it. We think it's  a steady compounder over the next several years.

[00:14:22]I don't want to miss talking about the earnings  report because we're recording this on Tuesday, just a few hours before that the new earnings  report comes out on Wednesday morning when you all are watching this video. So, just want to talk  about um what to expect after an earnings report, whatever comes out Wednesday morning. Do you  think if we have another blowout earnings report, the stock could react positively, negatively? Is  it hard to predict what can happen post earnings report release for a company of this size? I mean,  I would love for it to react positively. I have a feeling it's going to react negatively and that's  going to be a great buy the dip moment because I mean when you look at what's been happening  in the AI complex when a capex taker reports regardless of how good the numbers are that  they're selling off. So TSMC had a great report and it sold off. ASML had a great report and  it sold off. Samsung provided a great update and the whole complex sold off on that. So it  doesn't matter um on the on the taker side right now. of the fears are on the spender side and  so I don't think that we're going to get this broad rally back in kind of these capex takers  until the the spenders step up to the plate and hit home runs which I think they will. So I think  ultimately this is probably one that drops after earnings, maybe a 5 10% pullback after earnings.  And that's a great buying opportunity ahead of the Microsoft report, ahead of the Alpha, ahead of  the Meta report, ahead of the Amazon report. Well, they'll probably reaffirm if not hike their 2026  AI capex plans and provide directionally bullish commentary on 2027 and 2028 capex plans. And that  reignites this whole rally. I think looking at any dip during earnings as a buy opportunity is a  great advice, Luke, because I think we're already seeing lots of big money doing that right now. The  billionaires and the big money flowing right now is into names exactly like this along with some  others. And that is exactly what you outline in the special report that Dan and Luke did together.  Again, if you want to check that out and look at all of the names that they are looking at, not  only for the signals of long-term growth over the next few years of this AI infrastructure buildout,  but also following where the big money is moving and why they're investing so heavily in this area.  You can scan the QR code or click the link in the description to get that report right now. It's a  special offer only for the viewers of this video.

[00:16:27]So, take advantage of that while you can with the  link in the description. All right, Dan, let's get on to this last stock that you have for us  today. And this is very different than the other three that we have looked at. A much smaller name.  Yeah. EcoVist, ECVT is the ticker. Eco Vist is um sort of when I went down the refinery rabbit hole,  I found it because it's the largest regenerator of sulfuric acid in North America. Sulfuric acid  is the most widely produced chemical on Earth.

[00:16:54]It's in a lot of stuff. 50% of the demand is  fertilizer. A lot of it is used in the energy complex and in chemicals. And in the energy  complex, the reason why they regenerate it is that they get like 88 or 89% pure sulfuric acid  as a waste product, a spent sulfuric acid product from refineries. Refineries use it. They put it  through a bunch of heat and chemical processes that we don't want to get into. Um, and they  clean it up and purify it. And then they send 98 99% pure sulfuric acid back to the refinery.  And the refinery uses it to make something called alkalate. It's an essential part of gasoline. Now  your the gasoline in your tank is not one thing.

[00:17:39]It's five things or five or six things and one of  them is something called alkalate which sort of raises the octane rating uh and lowers the sulfur  content. The regeneration side of the business is a cash cow. They don't just regenerate, they own  the whole supply chain. They own the tanker cars.

[00:17:57]A tanker car loads up with Spenculfuric acid  at the refinery, goes back to EcoIst. Ecois purifies it, sends it back. I don't see big growth  here, but it's again, it's a cash cow situation.

[00:18:07]They're the biggest one in North America.  They've got the market sewn up. The market share is in excess of 50% and it's just going to  keep making money. The other side of the business, and that's about 45% of revenue. The other 45%  is what they call virgin sulfuric acid. You start with sulfur and you just make sulfuric acid.  And that's used in all kinds of things like you you can't mine these lower grade copper mines  without it, right? They use sulfuric acid to leech out the the copper from the ore. So, we  need a lot of copper. So, we're going to need a lot of sulfuric acid. Eco, I think the growth  in Ecoist comes from the virgin sulfuric acid and they'll they're acquiring more of that capacity  throughout North America. So, they'll acquire it, they'll grow it organically, and I think that part  of the business will become much larger over time.

[00:18:53]And it's a I think it's kind of a sleeper. I don't  think people have really caught on. I think when you you know, everybody knows about refiners and  everybody knows about crude oil. I don't think people have put sulfuric acid together. It doesn't  seem like it yet. So, you can still get it at a pretty good valuation. Yeah. This one not only has  that Iran war tie-in, but it also uh is tied to that AI infrastructure buildout and the demand for  materials because copper is a is a key player in so much of this buildout happening right now and  the whole electricity energy story as well. So, it's an interesting name and again, I totally  agree with you. It's one not very many people are looking at. And if you're looking at uh where  the chart is right now, this one's actually down a little bit. It's on a about a 9% pullback over the  last 3 months, even though it's still up very much for the year. So, it's a really interesting time  to be looking at this name. Also nice to know that their earnings um are starting to come in. They're  starting to see that growth. The revenue was like 700 something last year. It'll be 9 something  this year. A lot of that is sort of cost pass through. The contracts are these long-term 5 to  10year deals. I mean, you're physically hooked to the customer and you got a five or 10 year  contract that just renews because what else are they going to do? Four really interesting names  for our viewers today. Thank you both for the time and going through some of these really boots on  the ground infrastructure plays so closely tied to the energy story and the AI buildout and what's  happening in the Iran war II. Thank you both for the time today. If you are interested in more AI  infrastructure stories and the incredible growth this area has seen, make sure to watch this video.  We spell out some of those other major bottlenecks in the AI buildout. Uh, and this is from Keith  Kaplan. Make sure to watch the whole interview