Episode summary
How to Make Money From the Booming Demand for Energy | Odd Lots
Odd Lots
· · 53 min · Hosts: Tracy Alloway, Joe Weisenthal · Guests: Tyler Rosenlicht
Summary
Tyler Rosenlicht argues that the energy demand boom is not just a short-term AI story but a long-cycle reallocation of capital toward hard assets, with utilities, pipelines, nuclear, and selected infrastructure owners set to benefit. He says the world is moving from an era of abundance to an era of scarcity, where demand for power, grid capacity, and physical buildout is rising faster than the market expected, while regulation and politics remain the key risks.
A central theme is that electricity demand is increasingly constrained by reliability, not just cost. Tyler Rosenlicht says data centers cannot tolerate intermittency, which makes natural gas and especially nuclear more attractive than wind and solar alone. He also argues that some utilities can actually benefit from data-center loads if contracts are structured well, but others face affordability backlash and stranded-asset risk.
On valuations, he thinks investors still underappreciate utilities with the best growth profiles, while picks-and-shovels companies tied to the buildout, such as engineering and construction firms, remain attractive. He also expects more government involvement in nuclear, critical minerals, and other strategic supply chains because market incentives alone have not produced enough new capacity.
Key takeaways
- Tyler Rosenlicht says global energy demand could rise from about 178,000 terawatt hours to 220,000 by 2040, even assuming greater efficiency.
- Tyler Rosenlicht argues that data-center growth can help some utilities, but only where regulation and contract structures prevent local bill shock.
- Tyler Rosenlicht says the best utilities are now cheaper relative to growth than they were eight years ago, creating a valuation gap he thinks will widen.
- Tyler Rosenlicht thinks nuclear is a multi-phase renaissance story, but he expects meaningful new US capacity to require government backstops.
- Tyler Rosenlicht says the strongest near-term opportunities may be in picks-and-shovels companies supporting the buildout, not only in the most obvious energy names.
Notable quotes
“we think the world needs more energy. We think the world needs more power. It's going to service data centers”
“the world needs more energy. We think the world needs more power. It's going to service data centers. It's going to service industrial customers, residential customers, sort of everything”
“we've entered the era of scarcity. You know, we just don't have enough of all the stuff that we need for the economy to grow”
“Nuclear is sort of the one resource that can kind of serve both masters. It is 247 365, low variable cost, very high capacity factor, and it's also pretty clean”
“the best utilities are not trading at a lot higher multiple than the average utility and their growth rate differential is way better”
How the episode opens
You break the world into traditional and alternative. Good thing about traditional, so things like natural gas and coal, uh, is it's reliable 247 365 energy. Unfortunately, it has the emissions profile we don't like.
Uh, alternatives, let's just call it wind and and and and solar. Um, has the emissions profile we want, but it's intermittent and variable. You know, if you're a data center CEO, you're feeling pretty good about your business today.
You kind of wake up with night sweats about the power going out, right? You cannot lose power. You have a very expensive metal shell that's cooling servers and providing electricity and energy which means hey uh I can't take the intermittency.
I've got to use the base load. Nuclear is sort of the one resource that can kind of serve both masters. It is 24/7 365 low variable cost very high capacity factor and it's also pretty clean.
Hello and welcome to another episode of the OddLotss podcast. I'm Joe Weisenthal
And I'm Tracy Aloway. — Tracy, I saw an interesting headline this morning. — Just one.
Good point. There's I saw a million interesting headlines, but one that sort of caught mine. It was sort of market moving is there was this comment from uh Jensen Wong.
He was at a conference, the CES conference, and he was talking about how in the future, I guess, their chips are getting more efficient as chips tend to do that they may not as need as much intense cooling um uh cooling infrastructure or cooling equipment for future data centers. And a bunch of those like sort of infra those cooling names like train technology, they're like really getting clobbered because we know those have been like some of the big the big winners from the AI boom.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- energy demand
- infrastructure investing
- electricity market
- natural resource equities
- utility and pipeline investments
Companies and tickers mentioned
- Cohen & Steers
Watch the episode
Watch “How to Make Money From the Booming Demand for Energy | Odd Lots” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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