The market is at the beginning of the subsequent commodity supercycle, in keeping with vitality strategist and investor Jeff Currie of the Carlyle Group.
In a thread posted to X on Friday morningCurrie laid out a multipronged argument for why the market is correct at the start of the subsequent years-long rally cycle for commodities that he referred to as “essentially the most uneven commerce in trendy monetary historical past.”
First, the unreal intelligence commerce faces main bottlenecks, at the same time as 4 of the “Magnificent Seven” firms — Alphabet (GOOG, GOOG), Meta (META), Microsoft (MSFT), and Amazon (AMZN) — are anticipated to spend greater than $700 billion on capital expenditures in 2026 alone.
A type of bottlenecks is in bodily supplies. The Iran battle has triggered the most important vitality provide shock in historical past because the oil market has misplaced greater than 13.7 million barrels per day, in keeping with Goldman Sachs. Merchants argue that even after the warfare resolves, the taking part in area for the Persian Gulf — one of the vital vital provide markets on the planet for every little thing from vitality and metals to fertilizers — has modified.
On the identical time, the metals advanced has raced forward, with demand for copper (HG=F), aluminum (ALI=F), and different metals booming, even because the world’s high 20 miners are spending 40% lower than they have been on the peak of the final supercycle in 2012, Currie mentioned.
One other a type of bottlenecks is compute capability. As main AI labs, resembling Anthropic (ANTH.PVT), OpenAI (OPAI.PVT), and Google’s DeepMind, have pushed the boundaries of their frontier fashions, computing has emerged as a key constraint.
The demand has reached such a fever pitch that the Chicago Mercantile Trade is now engaged on developing a futures marketplace for compute, benchmarked to the rental costs of graphics processing models (GPUs). Shares in Cerebras (CBRS), a chip designer trying to rival Nvidia (NVDA), opened at a 90% premium to their IPO value when the corporate went public on Thursday.
All of that compute capability depends on the bodily infrastructure of semiconductor supplies and manufacturing, from vitality to metals.
“The chance exists as a result of capital has chased the AI commerce whereas ignoring the bodily property AI requires to run — property which have quietly turn into the best-performing asset class of the last decade,” Currie wrote.
