When I was a kid, my favorite thing to do at the dam near our home was hurl rocks as far out as I could. The splash was the fun part, but I always ended up spending far longer watching the ripples dance across the water until they reached the reeds on the far bank.
That image has stuck with me, because markets behave the same way. Right now, many investors have crowded around the splash. The AI power trade (utilities, grid equipment, data center cooling) have become the obvious place to be, and the gains have been spectacular. The trouble with standing where everyone else is standing is that you tend to pay a premium for the privilege.
But the ripples are still travelling outward. Every new gigawatt of demand sends a wave through copper, transformer steel, battery storage, backup generators, and eventually the unglamorous industries that may find themselves bidding against data centers for power. Those are the spots that the splash-watchers rarely think to look.
These days the splash interests me a lot less than the ripples. I keep catching myself wondering where the wave actually ends up, and who's quietly standing on the far bank when it finally arrives.
Sincerely,
Mitchell Lawler, Senior Investment Editor
