The Weekend Edition is pulled from the daily Stansberry Digest.
The energy grab continues...
On September 30, Amazon (AMZN) announced a 20-year, $3 billion power-purchase deal with Constellation Energy (CEG) that will also expand and improve Maryland's only nuclear power plant.
The Calvert Cliffs plant is about 75 miles from our headquarters in Baltimore. It's a similar distance from Northern Virginia's "Data Center Alley."
And on October 6, Alphabet (GOOGL) announced a $4.3 billion agreement with Constellation, also for 20 years, to upgrade and add capacity at six existing nuclear plants in Illinois, New Jersey, and Pennsylvania.
It's not a coincidence... The AI power players are facing a rising public backlash. They're looking for any and all ways to keep the generational infrastructure build-out going... And voters are increasingly concerned about data centers and rising energy costs.
Here in Maryland, for example, Gov. Wes Moore has pivoted hard... from wanting to "supercharge" data centers to proposing more safeguards against them.
This sort of political dance is playing out in states all over the country...
The AI Story Is an Energy Story, Too
Any support for data centers usually comes with the caveat that Big Tech firms "pay their own way." These Amazon and Alphabet deals deliver some of that.
As part of the Amazon-Constellation deal, new energy from the Maryland nuclear plant would serve PJM Interconnection's regional grid, which covers 13 states and has become increasingly strained (and expensive).
The planned addition of 190 megawatts at the Maryland facility, running around the clock, would cover the energy needs of about 150,000 homes − or a couple of data centers. That's a significant load, but it's also only 10% of the plant's current capacity.
Meanwhile, the Alphabet-Constellation deal will add 890 megawatts of capacity between six power plants, as part of the companies' larger 3,590-megawatt contract.
Added capacity won't arrive overnight...
At Calvert Cliffs, Amazon and Constellation will fund upgrades that aren't expected to come on line until 2030 at the earliest. It's a similar story for the Alphabet deal... Modernizing turbines, steam generators, and digital control systems will happen by 2028 at the earliest.
Until then... AI's power needs could keep folks' energy bills heading higher. But as long as AI spending from the big players also rises, the market boom can keep going, too...
That's what Stansberry Research senior analyst Brett Eversole is telling anyone who will listen right now. He says "Phase 2" of the AI boom is only beginning, and a major catalyst next month could send shares of some AI-related stocks soaring.
Watch Brett's free presentation before it goes offline. Just for tuning in, you'll hear about one stock to buy today as the AI boom gets ready for its next phase... and another to avoid at all costs.
In other news...
The government's (small) answer to skyrocketing diesel prices...
America still runs on other energy sources, too, like diesel... And diesel has its own troubles right now.
According to AAA, diesel fuel across the U.S. now averages more than $6.25 per gallon and hit an all-time high of $6.53 per gallon last month. And at some California stations, diesel prices topped $10... a price so high pumps didn't have enough digits to show it.
Solving the Problem of Diesel Prices
On October 5, President Donald Trump signed an executive order targeting that spike in prices, which we've seen since the start of the war in Iran.
The White House has considered banning diesel exports to combat higher prices. But banning diesel exports won't bring prices down.
In fact, it could have the opposite effect... When the idea first started gaining traction, Energy Secretary Chris Wright said that "the blunt tool of banning diesel exports definitely doesn't work."
So (for now), the government is taking a different approach.
Under Trump's executive order, farmers and truckers can temporarily use "dyed" fuel without paying taxes or penalties.
Dyed fuel is tinted red to mark it as exempt from the $0.24-per-gallon federal diesel tax. This fuel is normally reserved for farm equipment and other off-road use. Using it on public roads is typically illegal and carries steep penalties.
Even with that tax relief, the average diesel price would remain above $6 per gallon, based on the AAA data... and would still be up about 65% year over year.
Also, allowing truckers to use this fuel doesn't create more of it. So any truckers using dyed fuel would be taking supply away from farmers, construction workers, and other users, which could cause localized price jumps.
Meanwhile, oil reserves keep falling...
The U.S. released another 785,000 barrels of crude from the Strategic Petroleum Reserve ("SPR") in the week ending September 25, according to the Energy Information Administration. That brought the SPR below 284 million barrels – its lowest level since October 1982.
Since March, the U.S. has released more than 131 million barrels from the SPR. The Trump administration planned to release 172 million barrels to combat rising energy prices from the Iran war, so another 41 million barrels are likely to be discharged.
But this is a short-term fix for the energy market...
Speaking at an energy conference in England, Saudi Aramco CEO Amin Nasser said that the global economy has lost about 3 billion barrels of oil since the start of the Iran war.
He added that about 1 billion barrels of energy products have been released from corporate and government emergency reserves over the same period to lessen the impact.
Those reserves will have to be refilled at some point, though. Nasser estimates that this process could take two years, since emergency-reserve purchasers will have to compete with everyday users.
That'll only mean more demand for crude over the next two years, which won't bring about lower prices. Instead, if governments are buyers of crude in the years ahead, it could put a "floor" under prices.
That might not ease anyone's budget...
But it could be good for the energy companies that help produce and move crude. The same goes for those that deliver the power to keep the AI boom moving full steam ahead.
Those are the companies to keep an eye on moving forward.
All the best,
Corey McLaughlin
Editor's note: Not every AI stock will soar in the next leg of this boom. Our own Brett Eversole has warned that some of the biggest AI stocks of the past few years – names that made early investors 2X, 3X, or even 5X their money – could be headed for a painful fall. Recently, he revealed how to avoid holding the wrong stocks today... and why it's time to position yourself for a brand-new class of AI winners.
