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One sector that has seen a boost from the AI trade is utilities. Power-hungry data centers are fueling optimism (and stock prices) for what was once considered a fairly quiet sector. However, according to Kineo Capital managing partner Jim Strugger, utilities have more than just AI going for them.
"It's always been about the long end of the yield curve. Yields are lower and utilities are more attractive. We think that game's over, and we think the transition now is appreciating not just utilities, independent power producers, a lot of power energy-related companies. It's going to be more about scarcity going forward than necessarily about staring at the 10-year and judging whether or not you want to be in utilities."
One stock Strugger likes is Vertiv (VRT). In the video above, he explains why and how to play the stock using options.
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This post was written by Stephanie Mikulich.