Hedgeye Podcasts "Phase Two of AI: Who’s Got Staying Power?" | Protect the Pile: Episode 3
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Dec 6, 2025 Fernando Valle, Hedgeye’s Energy Sector Head, dives deep into the dynamics of natural gas and power demand revival after years of stagnation. He discusses the implications of grid underinvestment and how AI's growth is driving energy needs. Valle also distinguishes between weather-driven price spikes and the emerging higher baseline for natural gas. His insights on preferred equities in the Haynesville region and the landscape of LNG exports reveal key market opportunities. Plus, he highlights the role of demand in shaping commodity cycles.
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Phase Two: Monetize And Survive
- AI phase two shifts focus from "everything works" to who can monetize and sustain spending.
- Scale and cash flow become the moat; only a few large models will likely survive long-term.
Infrastructure Vs. Cloud Profit Pools
- Pure infrastructure providers face low margins while cloud providers capture margin with software and applications.
- Expect CoreWeave-like firms to have lower long-term profitability than Amazon, Microsoft, and Google.
AI Buildout Raises Commodities Demand
- Massive AI data center buildout will drive material demand for basic commodities and grid capacity.
- Underinvestment in mines and the grid could create structural supply pressure as AI ramps.
