Venture capitalist and investor Kevin O’Leary says he is shifting his investment strategy away from direct artificial intelligence (AI) technology stocks toward energy infrastructure, identifying electricity production and uranium as his primary focus for the next 36 months.
Shift From Tech to Power
Speaking on the Stock Sharks: The Deep End podcast, O’Leary stated that he is taking an indirect investment approach to the artificial intelligence sector rather than expanding his holdings in individual tech names, explaining that he prefers to focus on power generation over tech equities.
The ‘Picks and Shovels’ Strategy
“I’m a picks and shovels guy,” O’Leary said during the interview. “A lot of guys want me to take on more weighting into AI names. They’re all over the place. … But here’s how you play the picks and shovels. You buy energy stocks, you buy everything to do with making electricity from natural gas or turbines to turn it into electricity. Or my new theme right now is uranium.”
To illustrate how technology giants are prioritizing energy as an independent asset, O’Leary cited a $3 billion deal in Finland involving Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google to buy a power contract from a local utility. He noted the deal had “nothing to do with AI” and involved no data centers, stating that tech companies are simply trying to acquire long-term leases on power.
Nuclear Power and Regional Bets
According to O’Leary, nuclear power will play a critical role in meeting the electric grid requirements of computing infrastructure, citing small modular reactors as the cleanest and cheapest source of electricity.
“To me, the trade is now the energy trade,” O’Leary said. He identified small modular reactors as a primary technological driver for power generation over the next seven to eight years, noting that the reactors require uranium pellets to function.
O’Leary added that Canada holds a major global advantage in energy commodities, citing Saskatchewan for its uranium supply. He stated that he is concentrating his power investments on the Nordic countries and Alberta, Canada, because of their low electricity costs per kilowatt-hour.
How To Have Exposure To O’Leary’s Picks?
O’Leary explicitly noted that he executed his Canadian allocation by purchasing the iShares S&P/TSX 60 Index ETF (XIU.TO). For investors tracking this macro strategy, US-listed funds like the iShares MSCI Canada ETF (NYSE:EWC) provide similar broad regional exposure.
Furthermore, his focus on the nuclear power ecosystem aligns with funds such as the Global X Uranium ETF (NYSE:URA) and the Sprott Uranium Miners ETF (NYSE:URNM), which heavily weight Saskatchewan-based producers.
On the international power front, his thesis regarding low-cost European energy targets the jurisdictions tracked by the Global X MSCI Norway ETF (NYSE:NORW) and the iShares MSCI Finland ETF (BATS:EFNL).
| ETFs | 1-Month | 6-Months | YTD | 1-Year | 5-Years |
| EWC | 1.66% | 19.96% | 35.74% | 39.49% | 60.57% |
| URA | -5.24% | -9.23% | -5.06% | -4.86% | 23.64% |
| URNM | 10.14% | 72.26% | 87.85% | 112.27% | 266.96% |
| EFNL | -4.73% | -2.90% | 4.72% | -5.66% | -27.85% |
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
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