Rob Thummel, senior portfolio manager at Tortoise Capital Advisors, highlighted the significant potential for AI in the energy sector, emphasizing the critical role of energy infrastructure in supporting AI-driven electricity demand. Thummel noted that AI’s growth will increase natural gas demand, which underpins many energy stocks’ performance.
Key Highlights:
- Williams Companies Inc (NYSE): With a 4.4% dividend yield, WMB is poised to benefit from rising natural gas demand for data centers, supported by a robust pipeline infrastructure.
- Energy Transfer LP Unit (NYSE): Offering a 7% dividend yield and expected to see substantial growth due to increasing energy demand from AI and data centers.
- Targa Resources Corp (NYSE): A leading midstream energy infrastructure company, forecasted to grow significantly with a strong project backlog and increasing natural gas throughput.
- EQT Corp (NYSE): A major natural gas company expected to benefit from rising electricity demand driven by AI and data centers.
- Devon Energy Corp (NYSE): An upstream energy giant with strong free cash flow and a robust shareholder return program.
- Diamondback Energy Inc (NASDAQ): A high-yield dividend stock with a strategic focus on low-cost production and capital discipline.
- Chevron Corp (NYSE): A global oil and gas leader set to benefit from increasing natural gas demand and ongoing electrification trends.
- Cheniere Energy Inc (NYSE): One of the largest LNG companies, well-positioned to grow amid rising global gas demand and AI-driven electricity needs.
- Exxon Mobil Corp (NYSE): A dividend aristocrat with extensive growth opportunities in the Permian Basin and Guyana, focused on returning capital to shareholders.
Thummel’s insights suggest that AI will drive significant demand for natural gas, making these stocks attractive investments for leveraging the energy infrastructure needed to support AI growth.
