The Power Behind Wall Street's 2024 Energy Stocks Rally: Climbing Oil Prices, Geopolitical Risks, AI Boom and More

Analysts Notebook wrote a column · Apr 8, 2024 20:50

Energy stocks are outpacing the $S&P 500 Index (.SPX.US)$'s 9.1% gain this year to date after the sector emerged as the top performer among the index's 11 sectors in March. So far this year, the sector is the second-best performer after only the megacap-tech-heavy communication-services group.

The surge in energy stocks in 2024 isn't just due to climbing crude oil prices, which are at their highest since October. The sector's rise is also fueled by a brighter global economic outlook and its stocks' compelling value compared to the pricier S&P 500. Analysts note that strong free-cash-flow yields and better enterprise-value-to-Ebitda ratios make energy stocks attractive investments. Moreover, geopolitical risks, especially the looming threat of conflict between Israel and Iran, could push U.S. oil and gas stocks and crude prices even higher shortly.

Check out the top gainers among energy stocks:

The Power Behind Wall Street's 2024 Energy Stocks Rally: Climbing Oil Prices, Geopolitical Risks, AI Boom and More

Artificial intelligence (AI) is regarded as a significant economic force, with predictions suggesting it could contribute $15.7 trillion to the global economy by 2030. For AI to achieve its full potential, it depends heavily on two key resources: computing power and electricity. While the investment focus has largely been on computing power through semiconductors, the role of electricity is often underestimated.

Data centers, which are integral to AI operations, are projected to increase their electricity consumption from 2% to 10% of the world's total by 2030. This would require an amount of electricity comparable to the current capacity of the entire U.S. power grid. Although renewable energy will play an important role in supplying power for AI, it alone will not be sufficient to meet the forecasted demand.

$Marathon Petroleum (MPC.US)$ $NRG Energy (NRG.US)$ $Vistra Energy (VST.US)$ $Constellation Energy (CEG.US)$ $NVIDIA (NVDA.US)$ $S&P 500 Index (.SPX.US)$ $NASDAQ 100 Index (.NDX.US)$ $Nasdaq Composite Index (.IXIC.US)$

Source: MarketWatch, The Motley Fool

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lightfoot : the indexes are up- stocks falling. The charts said they should be climbing. u need a well program supercomputer to make $5 profit. This is a roulette Wall Street wheel you can't win. There is something very corrupt with Wall Street. THE HOUSE WHEEL

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lightfoot : buy at your risk. There is no science here

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lightfoot : Analysis are pumping targets to get your money

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