EXE: Operational efficiency, LNG demand, and strategic marketing drive growth and financial strength

Natural gas market outlook remains constructive with weather and LNG demand as key drivers. Operational efficiencies and cost reductions in Haynesville, strategic capital allocation, and new low-cost acreage in East Texas position the company for growth. Marketing initiatives target premium pricing and international expansion.

Based on Expand Energy Corporation [EXE] Stephens Annual Investment Conference Audio Transcript — Nov. 20 2025

(17:43 GMT) Expand Energy Price Target Raised to $138.00/Share From $136.00 by Piper Sandler

By Teresa Rivas

How many AI bulls does it take to screw in a lightbulb? It doesn't matter if there isn't enough electricity to turn it on.

Virtually anyone in the U.S. responsible for a utility bill knows the cost of power has soared and keeps going up.

A big part of the blame is put on artificial intelligence. AI data centers have huge appetites for electricity — and demand, in many cases, has outstripped supply.

The situation has gotten so bad, notes Gavekal Research's Will Denyer, that Big Tech companies like Microsoft have chips in inventory because of the lack of power.

China is just the opposite. Unlike the U.S., where electricity generation has stagnated for the past 25 years, China has lots of juice.

"This divergence in supply growth has created a wide gap in electricity pricing: Chinese electricity prices remain low and stable, while US prices are comparatively high and rising," writes Denyer, Gavekal's lead economic analyst.

"This abundant, inexpensive power gives Chinese tech companies a material edge over their U.S. peers," he said. "It is an advantage that may now outweigh access to the most advanced chips."

Denyer is quick to note that it doesn't mean the AI spending boom in the U.S. is coming to an end, but it could soon shift. The big beneficiaries — Nvidia, Advanced Micro Devices, Broadcom. and the like — can still win, but it will be harder to grow as quickly because of the bottleneck in electricity.

The solution just might be to invest in widening the bottleneck — either through companies that upgrade grid infrastructure, which Denyer calls "a critical weak point," or through players in natural gas.

"Natural gas is likely to play a key role, both near term, as data centers turn to gas-fired generators, and longer term, as new natural gas power plants are built," he writes. "Combined with rising demand for liquefied natural gas exports, this creates a solid case for going long natural gas, whether through futures, producers or infrastructure operators."

Expand Energy, the nation's largest natural gas producer, and power plant services firm Quanta Services have both been Barron's stock picks in the past month.

Other energy options are solar and wind for power-hungry data center operators who need more juice quickly.

"To conclude, the AI boom is set to persist, but investors should adapt their positioning to reflect a growing divergence in power availability, " Denyer writes. "The next phase of the AI boom may best be played by gaining exposure to Chinese tech and US power plays."

That's a bright idea.

Write to Teresa Rivas at teresa.rivas@barrons.com

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