Dear Reader,
In 2000, I told Barron's magazine that a very popular, well-loved dot-com stock was headed for a world of hurt.
That prediction proved spot on.
Soon after, the stock dropped 90%.
I fielded a lot of attention for that contrarian call.
And I expect this time around will be no different...
Because today, I'm pounding the table with the opposite message.
The very same company that I warned about over two decades ago is now the lifeblood of AI data centers.
Yet almost no one has caught up with the story this time around.
While the media gloms onto the "AI Chip Wars" story... they've completely missed this company's essential role in building out data centers.
Their hardware is so essential that the data center industry uses enough of it to stretch around the world 8 times – in a single building!
So, if you own Nvidia stock now, you might be well-served to sell those shares and check out this under-the-radar play instead.
Or if you missed the boat on Nvidia, this is a rare second chance to target tremendous profit potential as AI data centers spring up in every corner of the world.
Get my full take on this exciting play right here...
Sincerely,
Eric Fry
Senior Macro-Investment Analyst, InvestorPlace
Digging Into Demand: Copper's Scarcity Premium Is Rising
Authored by Jeffrey Neal Johnson. First Published: 1/29/2026.
Key Points
- The explosive growth of artificial intelligence data centers is driving an unprecedented surge in copper demand.
- Major mining producers are utilizing new leaching technologies to extract additional value from waste rock stockpiles without digging new mines.
- Investors can access this structural growth trend through diversified funds that offer broad exposure to global producers rather than single stocks.
Gold and silver have dominated financial headlines for the last 18 months. Driven by central bank buying, geopolitical instability, and global economic uncertainty, precious metals have provided a necessary shield for investors seeking safety. However, as we enter February 2026, the market narrative is shifting. The defensive trade is giving way to a growth trade, and copper is leading the charge.
Currently testing the $5.85 to $6 per pound range (approximately $12,900 per metric tonne), copper is decoupling from traditional industrial cycles. In previous decades, copper prices moved in lockstep with construction and GDP trends — when housing slowed, copper typically fell. Today, that correlation is breaking. A new, price-inelastic, dual-engine is driving demand: the electrification of the global power grid and the massive energy needs of artificial intelligence (AI).
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Today's copper story is about more than building electric vehicles. Data centers running advanced AI models consume far more power than traditional server farms. That infrastructure requires vast amounts of copper cabling for transmission lines, transformers, and grounding systems. At the same time, global copper supply is tightening because of aging mines and a lack of new discoveries. This supply-demand imbalance creates a compelling setup for the sector that looks different from any cycle investors have seen before.
Freeport-McMoRan: Capturing the AI Demand Wave
For investors looking to capitalize on the volume of copper needed for the AI transition, Freeport-McMoRan (NYSE: FCX) stands out as a primary beneficiary.
As one of the world's largest publicly traded producers, Freeport's stock price is highly sensitive to the spot price of copper.
Unlike diversified miners that also sell iron or coal, Freeport is a pure copper play. When copper prices rise, Freeport's profit margins expand materially.
This leverage was evident in the company's fourth-quarter earnings report released Jan. 22, 2026. Freeport reported earnings per share (EPS) of $0.47, beating analyst estimates of $0.28, and revenue of $5.63 billion. Those results confirm that theoretical demand from tech and infrastructure is translating into real cash flow.
Innovation Through Leaching
Beyond traditional mining, Freeport is deploying a strategy that differentiates it from competitors: advanced leaching techniques. Developing a new mine can take more than 15 years because of permitting, environmental studies, and construction. However, Freeport holds massive stockpiles of waste rock from decades of prior operations.
By applying proprietary leaching processes to these stockpiles, the company can extract residual copper that was previously uneconomic to recover. This approach brings new copper to market without the decade-long delay or huge capital expense of opening a new mine. It is effectively recovering value from material that was once considered waste — the quickest way for a major producer to help ease the immediate supply squeeze driven by the AI boom.
Navigating Supply Constraints
Investors should note that Freeport is managing challenges at its Grasberg district in Indonesia following a mudslide in late 2025. While this temporarily limits production, it paradoxically supports the bullish thesis: the removal of that supply from the global market helps keep copper prices elevated, which boosts the profitability of Freeport's North and South American operations.
Southern Copper: The Value of Scarcity
While Freeport represents the demand-side leverage of higher prices, Southern Copper Corporation (NYSE: SCCO) illustrates the value of scarcity on the supply side.
In mining, reserves — the amount of metal a company has in the ground that is economically viable to extract — are the ultimate asset. Southern Copper holds the largest copper reserves of any publicly traded company.
As permitting for new mines becomes more difficult amid stricter environmental rules and local opposition, companies with approved projects command a premium.
Southern Copper is currently capitalizing on that advantage with its massive Tía María project in Peru.
Project Progress and Income
After years of delays, Tía María is now under construction and was approximately 25% complete as of early 2026. That progress is a critical differentiator: while many competitors still search for deposits or fight for permits, Southern Copper is advancing a large-scale supply source that could come online sooner than new discoveries.
Southern Copper also appeals to income-oriented investors. The company recently declared a quarterly dividend of $1.00 per share. In the volatile world of commodities, that payout is a meaningful bonus — allowing investors to collect yield while waiting for Tía María to ramp up. Although the company faces political risk common to Latin America, its low-cost operations in Mexico provide a financial cushion that supports the dividend.
How to Invest Without Picking Winners
Investing in individual mining stocks carries company-specific risks the metal itself does not. A mine collapse, labor strike, or a change in local tax policy can hit a stock even as copper prices rise. For investors who want exposure to the copper thesis — that prices will increase due to shortages — without single-company risk, Exchange-Traded Funds (ETFs) provide an efficient alternative.
- Global X Copper Miners ETF (NYSEARCA: COPX): This fund provides broad diversification, tracking roughly 48 miners globally, including firms in Canada, Latin America, and Australia. It's a practical vehicle for investors seeking wide exposure to the sector; if one miner has a problem, the rest of the portfolio helps absorb the shock.
- Sprott Copper Miners ETF (NASDAQ: COPP): This fund takes a more aggressive stance for the high-conviction investor. It typically has heavier weightings in large-cap, pure-play miners like Freeport-McMoRan. If major producers rally, this ETF is positioned to capture that upside more directly than a broader index.
The Structural Floor for Copper
The current rally in copper is fundamentally different from speculative surges in cryptocurrency or fear-driven buying of gold. It is driven by utility and necessity: the world cannot build AI data centers, electric vehicles, or renewable power grids at scale without copper. There is no practical substitute.
With prices testing historical highs and supply constraints deepening, copper appears to be establishing a structural floor. Whether through volume leaders like Freeport-McMoRan, reserve giants like Southern Copper, or diversified ETFs, the evidence suggests the copper sector is positioned for a multi-year run. For investors who missed the initial move in precious metals, copper now offers a strategic entry into the next — and perhaps most durable — phase of the commodities cycle.
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