Five interesting things that Hodges Capital research analysts discovered this week...
#1 METAL OF ELECTRIFICATION: Copper prices remain up approximately 29% year over year as electrification, grid investment, energy storage, connectivity, and AI data centers drive structural demand. Approximately 65% of global copper consumption is tied to electricity-related applications, while S&P Global expects electricity demand to rise 50% through 2040. Long project lead times, declining ore grades, and limited new capacity continue to constrain supply. This imbalance could support elevated prices, stronger margins, and improved cash generation for low-cost producers, while select U.S. smelters may benefit from favorable regional economics and processing terms.
#2 SKATING TO WHERE THE PUCK IS GOING: Last week, our technology analyst, Brian Gerber, discussed early adopters of AI. Over the next 12 months, we are focusing our portfolio investments on companies using AI to enhance personal productivity, e-commerce, and customer service. These applications require AI to move beyond data centers and into the real world. To accomplish this, chips and hardware will increasingly shift toward what is known as “edge computing,” in part to reduce latency.
#3 AD IMPRESSIONS: Travel advertisers pay multiples of what other industries pay for impressions on social media. According to Criteo, this premium reflects the growing influence of social media on travel decisions, as approximately 38% of U.S. adults get leisure travel ideas from social media or short-form videos, more than those who turn to search engines.
#4 HEALTH INSURANCE PREMIUMS: Health insurance has never been more expensive, with average annual premiums for employer-sponsored family coverage rising another 5% year over year to a record $28,303, according to the Kaiser Family Foundation. Over the past four years, the average annual premium has surged 26%, nearly twice the rate of CPI inflation.
#5 USELESS KNOWLEDGE: Bananas are berries, but strawberries are not.
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