Bank of America recommends resources stocks to bet on AI

[Redator]

Investors looking to ride the artificial intelligence wave should combine traditional tech exposure with commodities, according to Bank of America Corp. (BofA) strategists. The bank highlights that the rapid buildout of AI-driven data centers is fueling demand for energy and raw materials, particularly copper.

AI’s growing appetite for copper

“Artificial intelligence devours commodities,” wrote BofA’s team led by Michael Hartnett.

The strategists argue that owning commodities stocks offers a cheaper, more diversified way to gain exposure to the AI boom compared to expensive mega-cap tech names. With miners already outperforming big tech benchmarks, BofA sees the sector as a beneficiary of the AI-driven demand surge.

Copper, a critical input in power cables, electric vehicles, and renewable energy, is emerging as a linchpin for the AI boom.

BloombergNEF forecasts a global copper shortage of 6 million tons by 2035, with demand growth increasingly tied to data centers. AI-related copper use is set to average 400,000 metric tons annually over the next decade, peaking at 572,000 tons in 2028. Over that period, cumulative data center demand is expected to exceed 4.3 million tons.

Supply Strain and Price Outlook

While demand accelerates, supply growth is lagging. BNEF projects copper supply will hit 29 million tons by 2035, still well short of forecast demand. According to Bloomberg, the metal could account for nearly 6% of a data center project’s capital expenditure. With demand tightening and supply constrained, copper prices could reach $13,500 per ton by 2028.