The XLE energy ETF has raced ahead of the broader market again in the past month, rallying nearly 13% against the S&P 500‘s 4% drop, as global demand for oil outpaces its supply. An output decision from OPEC+ when the bloc meets Monday could be the next big upside or downside catalyst for the sector.
Craig Johnson, chief market technician at Piper Sandler, remains bullish on the sector.
“It’s very clear, any sort of move from here is likely to go up to $65, and then you’re going to see a topside breakout,” he told CNBC’s “Trading Nation” on Friday. “You’ve made a beautiful higher low on a multiyear basis when you look at that XLE chart.”
The XLE ETF closed Friday at $53.84. A move to $65 implies 21% upside.
Johnson said that, although many portfolio managers tend to undervalue energy companies, the global environment and technical setup for the sector make it a strong bet.
“These portfolio managers aren’t going to be able to avoid this space for long,” he said. “For the traders out there today, I think you’ve got to get ahead of the move.”
“These are all stocks that probably should be bought, because they are going to definitely benefit going forward,” he added.
In the same “Trading Nation” interview, Michael Bapis, managing director of Vios Advisors at Rockefeller Capital, also made his case for the sector.
“The energy sector got slammed during the pandemic,” he said. “They’re also going to benefit from the recovery.”
From a fundamental standpoint, Bapis said, many of these energy companies have low price-to-earnings ratios and high dividend yields, which make them strong plays, especially in the current growth-to-value rotation environment.
The sector will also benefit as winter approaches and demand for natural gas and oil ramp even higher, thus exacerbating the current supply and demand imbalances, Bapis said.
“I see the recovery lasting,” he said, adding “if we look 12 to 18 months out, you’ll see this sector higher.”
Swedish multinational Sandvik says it’s successfully deployed a pair of fully autonomous Toro LH518iB battery-electric underground loaders at the New Gold Inc. ($NGD) New Afton mine in British Columbia, Canada.
The heavy mining equipment experts at Sandvik say that the revolutionary new 18 ton loaders have been in service since mid-November, working in a designated test area of the mine’s “Lift 1” footwall. The mine’s operators are preparing to move the automated machines to the mine’s “C-Zone” any time now, putting them into regular service by the first of the new year.
“This is a significant milestone for Canadian mining, as these are North America’s first fully automated battery-electric loaders,” Sandvik said in a LinkedIn post. “(The Toro LH518iB’s) introduction highlights the potential of automation and electrification in mining.”
The company says the addition of the new heavy loaders will enable New Afton’s operations to “enhance cycle times and reduce heat, noise and greenhouse gas emissions” at the block cave mine – the only such operation (currently) in Canada.
Electrek’s Take
From drilling and rigging to heavy haul solutions, companies like Sandvik are proving that electric equipment is more than up to the task of moving dirt and pulling stuff out of the ground. At the same time, rising demand for nickel, lithium, and phosphates combined with the natural benefits of electrification are driving the adoption of electric mining machines while a persistent operator shortage is boosting demand for autonomous tech in those machines.
European logistics firm Contargo is adding twenty of Mercedes’ new, 600 km-capable eActros battery electric semi trucks to its trimodal delivery fleet, bringing zero-emission shipping to Germany’s hinterland.
With the addition of the twenty new Mercedes, Contargo’s electric truck fleet has grown to 60 BEVs, with plans to increase that total to 90. And, according to Mercedes, Contargo is just the first.
Contargo’s 20 eActros 600 trucks were funded in part by the Federal Ministry for Digital Affairs and Transport as part of a broader plan to replace a total of 86 diesel-engined commercial vehicles with more climate-friendly alternatives. The funding directive is coordinated by NOW GmbH, and the applications were approved by the Federal Office for Logistics and Mobility.
Data centers powering artificial intelligence and cloud computing are pushing energy demand and production to new limits. Global electricity use could rise as much as 75% by 2050, according to the U.S. Department of Energy, with the tech industry’s AI ambitions driving much of the surge.
As leaders in the AI race push for further technological advancements and deployment, many are finding their energy needs increasingly at odds with their sustainability goals.
“A new data center that needs the same amount of electricity as say, Chicago, cannot just build its way out of the problem unless they understand their power needs,” said Mark Nelson, managing director of Radiant Energy Group. “Those power needs. Steady, straight through, 100% power, 24 hours a day, 365,” he added.
After years of focusing on renewables, major tech companies are now turning to nuclear power for its ability to provide massive energy in a more efficient and sustainable fashion.
Google, Amazon, Microsoft and Meta are among the most recognizable names exploring or investing in nuclear power projects. Driven by the energy demands of their data centers and AI models, their announcements mark the beginning of an industrywide trend.
“What we’re seeing is nuclear power has a lot of benefits,” said Michael Terrell, senior director of energy and climate at Google. “It’s a carbon-free source of electricity. It’s a source of electricity that can be always on and run all the time. And it provides tremendous economic impact.”
Watch the video above to learn why Big Tech is investing in nuclear power, the opposition they face and when their nuclear ambitions could actually become a reality.