Money & Megatrends

October 2, 2025

By Brian Hunt

 

Inside today’s issue:

  • The AI Power Consumption theme is still running and creating winners… are you in?
  • How some very smart hedge funds are betting on AI right now?
  • A stealth bull market you’re most likely missing…

 

The AI Power Consumption Theme Is Still Running and Creating Winners… Are You In?


Solar Panel

 

This week, we are seeing plenty of evidence that the “AI Power Consumption” theme is alive and well. I bet this theme keeps running. Here’s why…

In late 2022 – before Chat GPT was released to the public – I began telling friends and colleagues that AI was about to explode into public awareness. Shortly after, AI did just that and one of the biggest multi-faceted investment themes of our lives was born.

Given AI’s enormous promise, the world’s largest and richest companies are embarking on the biggest capex spending cycle in history. Giants like Google, Meta, Microsoft, and Open AI are spending hundreds of billions of dollars on data centers, AI chips, power grids, and other infrastructure components. This AI infrastructure is poised to consume huge amounts of electricity.

The narrative around all this spending has launched power producers into a strong bull market. The power producer fund (XLU) we track is up 18% this year and hit a new all-time high this week.

We bet this trend keeps running higher. In addition to an ETF like XLU, investors can consider individual power producer names with strong revenue growth like Constellation (CEG) and Vistra (VST).

The power producer uptrend continues


XLU Stock Graph 10.2

 

How Some Very Smart Hedge Funds Are Betting on AI Right Now


Oil Refinery 10.2

 

The AI Power Consumption trade isn’t limited to just power producing companies.

Many of the world’s top investors see the U.S. natural gas industry as the preferred way to play AI’s power consumption boom.

The bull case for natural gas and AI goes like this: Big tech is poised to builds dozens upon dozens of giant, power-hungry data centers over the next five years.

This will drive increased demand for natural gas, which is the preferred clean-burning fuel for many power plants across America. Growing European demand for U.S. natural gas (to give Russia the finger) is also poised to be a natural gas demand driver.

Given all this, some of the world’s most informed and most powerful hedge funds have taken large positions in big American natural gas producers EQT (EQT), Range Resources (RRC), and Expand Energy (EXE). They are betting these stocks double then triple over the coming years.

Should we follow their lead?

The market thinks so. As you can see from the chart below, natural gas blue chip Range Resources is in a long-term (albeit volatile) uptrend… and is knocking on the door of a new 52-week high. Fellow leaders EQT and Expand look much the same. We bet this theme achieves the aforementioned new high.

Natural gas blue chip Range Resources nears a new high


RRC Stock Graph 10.2

 

Massive AI Spending Is Set to Drive This Sector Higher…


Solar Panel 10.2

 

While we’re on the subject of AI and power demand, don’t forget about the stealth bull market in solar energy. You might laugh, but this trend is making me money.

In our September 23 issue, we made the case for owning solar.

We covered how the general thinking among industry experts is that solar energy can’t compete with nuclear and fossil fuels to supply huge amounts of “always there, baseload” power. However, cheap and easily installed solar systems can definitely supply smaller individual power consumers like homes, offices, stores, and small factories.

That’s the fundamental case.

Regular readers know that around here, the fundamentals of a trend are less important than what the market thinks of a trend. Right now, the market likes the bull case for solar stocks. The big solar stock ETF (TAN) is in a strong uptrend and just reached a new 12-month high. Individual leaders here include Enphase (ENPH) and First Solar (FSLR).

One special thing makes me extra interested in solar stocks. There’s a pervasive belief that Trump & team are not supportive of solar energy. The U.S. government is phasing out some important financial incentives that support solar energy. Yet… solar stocks continue to rise.

When an industry group rises during a time where it seems it should not, then you have a powerful uptrend on your hands. That’s what’s happening in solar right now… yet the public is different. Color me bullish. Long solar.

Solar stocks power to new highs


TAN Stock Graph

 

Market Notes

 

  • Three of the world’s most important technology firms – Nvidia (NVDA), Taiwan Semiconductor (TSM), and ASML (ASML) broke out to new highs this week. These companies are “linchpins” of the AI semiconductor supply chain. Their new highs tell us the AI theme is alive and well. Trade accordingly.
  • The biotech trade we’ve written about many times in the past month continues to run. Today, we see new highs for many biotech related ETFs, including small cap biotech (XBI).
  • This week brings more gains to our silver trade. Silver just punched through the $47.40 per ounce level to reach a multi-year high.
  • The psychedelics theme we highlighted on September 29 continues to run higher. The Psychedelics ETF (PSIL) just registered a fresh 12-month high.

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