RJ Hamster
Copper’s Mixed Signals Are Your Next Big Opportunity
Eric Fry
Editor, Smart Money
DAILY ISSUE
Copper’s Mixed Signals Are Your Next Big Opportunity
Hello, Reader.
It might be surprising to learn that the market has its own doctor, sometimes more trusted than Wall Street analysts.
And it’s made of metal.
Copper has earned the nickname “Dr. Copper” for good reason: Because the metal is essential to construction, manufacturing, power generation, and more, its price moves like a real-time health barometer for the global economy.
Rising copper demand – and rising prices – is a good sign for the economy. On the other hand, falling prices often predict a slowdown.
But right now, copper is sending a signal as messy as a doctor’s handwriting.
The market is currently navigating a period of mixed signals. Copper’s price closed at $6.03 yesterday, not far off its all-time high of $6.50 on January 29 of this year. Long-term structural demand is driving prices higher. But weak near-term demand out of China is creating volatility.
So, let’s make Dr. Copper our patient today and examine its recent movements. After all, demand-driven and supply-driven spikes lead to very different outcomes for investors.
Then, I’ll show you exactly which stocks are positioned to profit from both sides of the story.
Let’s jump in…
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The AI Economy Runs on Copper
The demand for copper has surged to near-record levels, driven by several factors – a major one being artificial intelligence.
Copper runs through virtually every component of AI infrastructure. Data centers, in particular, are essentially a copper-and-aluminum exoskeleton wrapped around racks of silicon. These facilities consume enormous volumes of copper wiring, busbars, and switchgear.
Therefore, as data centers pop up around the world, copper demand will jump accordingly. S&P Global projects worldwide copper demand will rise from approximately 28 million metric tons today to 42 million metric tons per year by 2040.
Data centers also have an immense thirst for power. The International Energy Agency (IEA) expects U.S. electricity demand to grow around 2% per year from 2026 to 2030, as AI data centers, semiconductor fabs, and other large industrial loads – involving copper – connect to the grid.
The headlines reflect this.
This week alone, Alphabet Inc. (GOOGL)announced it is developing a second data center in Georgia, pledging to cover the power and infrastructure costs for the site – bringing Google’s total Georgia investment to $1.2 billion. Dallas-based data center developer DataBank secured a $2 billion loan from a group of banks led by Mitsubishi UFJ Financial Group to build Oracle Corp. (ORCL) data centers. And two former DirecTV data center facilities in Washington and Minnesota hit the market for a combined $27 million.
Data centers are being built, bought, and sold at a record pace… meaning copper’s demand is only going up.
But copper can only give as much as it has.
Supply Is Where Things Get Complicated
Copper prices can rise significantly due to supply disruptions – and currently, two major ones are at play.
The first is shipping. Disruptions around the Strait of Hormuz are rerouting and slowing tankers and cargo ships, creating supply-chain bottlenecks and delaying copper shipments.
When supply temporarily shrinks, traders price in scarcity fast, which in turn spikes spot premiums, especially in import-heavy regions – and that kind of price jump is a very different signal from a healthy global-growth rally.
The second is China. Starting next Friday, May 1, China – a major driver of copper – will restrict exports of sulfuric acid, a chemical essential to copper mining. When production inputs are unavailable, costs spike before actual shortages occur. Traders immediately price in future supply risk, constraining supply at the production level, which is the hardest to fix quickly.
So yes, copper is rallying, but it’s not entirely “healthy.”
It appears that copper’s rising demand is putting it on a solid path, but when supply risk is in the mix, it causes copper’s vital signs to go up – due to stress, not strength.
Adding to copper’s trajectory, Goldman Sachs maintained its forecast for the copper price to average $12,650 per metric ton this year and its estimate of a 490,000-ton surplus in 2026. In the longer term, the International Energy Agency (IEA) sees a 30% deficit by 2035.
Copper is simultaneously abundant and scarce, depending on where you look. But for investors, that tension is creating opportunity…
How to Play Both Sides of Copper
Because copper’s rally is being driven by two distinctive forces – genuine demand growth and supply risk stress – the best approach is to invest in stocks that win in either scenario.
On the demand side, the winners are energy and raw materials companies that benefit as copper gets consumed at record rates by AI infrastructure, power grids, and industrial expansion. On the supply side, the winners are copper mines, whose profit margins expand when prices spike faster than their production costs.
The stock that sits squarely at the intersection of both is a pure-play copper miner and Fry’s Investment Reportholding Freeport-McMoRan Inc. (FCX).
It hit an all-time high of $70.97 on Monday after delivering strong earnings this week – a move that illustrates both its underlying strength and volatile environment.
When demand spikes, FCX sells more copper into a strong market. When supply shock hits, copper prices jump faster than FCX’s costs do, expanding margins either way.
Beyond Freeport-McMoRan, my Fry’s Investment Report portfolio includes several other positions built for this demand and supply risk. For example…
- A precious metals miner that’s up 286%…
- A key energy company that’s gained 50%…
- An oil & gas company with 46% returns…
- And an independent energy producer up 25%
The bottom line: Dr. Copper’s diagnosis is complicated – but it makes for healthy returns for investors.
Click here for more details on how to join my Fry’s Investment Report service.
Eric Fry
Editor, Smart Money
P.S. As we just discussed, copper’s rising prices have much to do with artificial intelligence’s growing prevalence and infrastructure needs – and that’s not changing anytime soon.
AI is entering its next phase as more companies join the agentic AI market, but the names that delivered solid returns may not be the same ones profiting from this new form of technology. That’s why I’m creating a free presentation to alert investors about the details of AI’s upcoming shift, which could cost you years of gains if ignored…
Keep an eye on your inbox next week for a direct link to that broadcast.
