AI isn’t just the LLM of the week and hardware demand. It’s an entire ecosystem.
And it’s an ecosystem powered in the real world. With resources you can touch, feel, price and ship.
There’s, of course, a need for land for data centers. Once those contracts are signed, the centers have to be built. They require power and water.
More than that they the earth raw materials critical minerals and other scarce resources.
The construction boom coincides with the stealth return of the “debasement trade” making everything priced in dollars more expensive.
Rising yields in the bond market reveal the demand for capital. That’s why the cost of capital itself is rising — for government and private enterprise alike.
On the front lines: copper.
Economists refer to the metal as “Doctor Copper” because its rising price tends to reflect economic growth.
It’s a key, albeit behind-the-scenes, element of the AI story.
Prices have already risen. You can expect them to go even higher, according to a forecast by Deutsche Bank:
If the bank’s numbers are correct, copper could be in for another 20-30% rally by the end of the first half of 2027 — nine months from now.
Currently, copper sits near an all-time high. But many resource companies have taken a hit in the market over the past few days.
Today, Andrew looks at a midcap copper producer that is strongly leveraged to higher copper prices.
It’s not a major player, but its operations in the Americas and future developments give it both a margin of safety and some upside catalysts beyond the price of copper.
~ Addison
P.S. We’ll be back with Grey Swan Live! tomorrow with Shad Marquitz. We’ll be sharing our insights from last week’s trip out to Colorado to interview mining executives, and what we see happening in the resource space now.
This week on the Grey Swan Trading Fraternity, Andrew and I will cover what to expect markets in the fourth quarter of the year. Some sectors perform much better than others – and stocks tend to set up for a year-end rally. We’ll look at the bull and bear case. We’re at a special time this week: Friday at 3 p.m. ET
