When asked about what he plans to do when he takes office, President Trump’s two priorities were to close the border with Mexico and “Drill, Baby, Drill!” The latter was a reference to a return to an energy self-sufficiency policy, which had been achieved during his previous term in the White House.
The explosive gains made by the “Magnificent 7” stocks over the past few years is largely due to their respective involvement in Artificial Intelligence. However, the exponential rise of data centers required to handle AI comes with a commensurately larger rise in clean and reliable power source needs. The unreliability of solar and wind power has shown the need for increased oil and gas.
The energy industry had already begun to experience a resurgence, and the incoming administration’s goal to once again attain US energy self-sufficiency is like throwing kerosene on a bonfire. Companies in the drilling, refining, and midstream distribution sectors are all rising in price, and analysts anticipate the trend to continue for the foreseeable future.
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