Cheap AI Plumbing, Hedged
ANDYLΞNZ@andy
+2.3%
since Oct 3
The idea
I'm betting on the boring plumbing behind the AI buildout: gas pipelines, regulated utilities, and grid equipment makers that have real demand even if AI spending cools, bought without paying for the hype. Since an AI bubble popping is my main worry, about a quarter sits in a hedge of quality, financially strong companies trading well off their highs, plus extra cash to deploy if things crash. No single stock dominates, and I'm holding this for years rather than reacting to any one quarter.
What it owns
- Transformers, switchgear and copper are the physical infrastructure of the power buildout, with decades of non-AI demand supporting them. · EatonIt makes switchgear and power management equipment every grid upgrade needs, with broad order backlog across electrification beyond just data centers., HubbellIt sells connectors and enclosures utilities buy for maintenance driven by aging infrastructure more than AI trends., Quanta ServicesIt physically builds and maintains transmission lines and substations, work the grid needs done whether or not AI budgets stay elevated., Freeport-McMoRanIt mines copper that goes into every wire and transformer, demand rooted in electrification broadly rather than AI alone., nVent ElectricIt makes electrical enclosures and cooling gear tied to electrification broadly, with recent Maverick Power acquisition deepening its power equipment reach.27%
- Pipelines move natural gas that powers data centers and earn fees on volume regardless of whether the AI boom continues. · Williams CompaniesIt moves a large share of US natural gas through pipelines, earning steady fees on volume whether or not AI-specific demand continues., ONEOKIt gathers and processes natural gas, with volumes tied to real production and throughput rather than AI-linked expectations., Kinder MorganIt earns fees moving gas through its network regardless of AI trends, generating steady cash flow that survives sentiment swings., Energy TransferIt is priced as a cheap midstream operator, so the valuation already assumes little of an AI boom and it earns on steady distributable cash flow.22%
- Financially strong companies trading well below their recent highs have limited exposure to AI sentiment swings. · PepsiCoIt sells essential snacks and beverages with consistent demand across economic cycles and maintains steady margins and cash generation., MerckIt generates large, steady cash flows from drug franchises and trades cheaply versus its own history, providing stable value independent of technology spending., MedtronicIt delivers medical devices with decades of consistent revenue and margins at a price well below its all-time high, independent of AI spending.21%
- Utilities sell electricity at regulated prices, so their earnings stay steady even if technology spending drops sharply. · Duke EnergyIt sells regulated electricity in the Southeast regardless of who the buyer is, so earnings survive an AI bust as long as regulators approve grid spending., Southern CompanyIt earns regulated returns on power sales whether the buyer is a data center or a household, with base earnings stable across AI cycles., American Electric PowerIt owns the largest transmission network in the country and earns regulated returns as long as regulators approve the grid upgrades that infrastructure requires.17%
- This bucket contains positions that provide diversification and risk management across the take. · It sells footwear and apparel with pricing power and direct-to-consumer channel strength that can offset manufacturing cost pressures., It produces premium spirits and beer with global brand recognition and pricing leverage during economic uncertainty.10%
- Cash3%