The Elemental Energy Link

Every three days, a new data center opens somewhere in the world—with many classified as hyperscale.

These data centers consume massive amounts of energy. Microsoft Corp’s (NASDAQ: MSFT) Stargate project, a $100 billion data center built exclusively to house a supercomputer for OpenAI, will consume 100% of the electricity output of a large nuclear plant.

Sourcing reliable energy supplies has become a critical aspect of capital expenditure plans as AI adoption accelerates, particularly in data-intensive sectors like cloud computing and autonomous systems.

The emerging global information and intelligence infrastructure will need every joule, watt, and btu it can get to keep pace with surging energy demand. And the scramble to secure supply creates an opportunity for new energy sources.

The pull of surging electricity demand has injected new life into mothballed nuclear power plants, accelerated investment in small modular reactors (SMRs), and created new markets for traditional hydrocarbons—including hydrocarbon’s elemental power source—hydrogen.

However, moving hydrogen gas to where it’s most needed poses significant challenges. As the lightest element in the universe, it’s difficult to contain. Cooling it to a liquid takes a lot of energy to cool and pressurize.

But binding it up in ammonia yields a dense store of hydrogen that can be shipped anywhere in the world at room temperature and under normal pressure.

The other day, I shared some thoughts on Dorian LPG LTD (NYSE, LPG), a profitable shipping company operating a fleet of 25 modern, very large gas carriers (VLGCs).

VLGCs ship liquified petroleum gas (LPG) like propane and butane. Transporting LPG requires only moderate pressure and ambient temperature. They do not include LNG (liquified natural gas), which involves transport at low temperatures (-162 degrees C).

Dorian, headquartered in Stamford, CT, is the only publicly traded U.S.-based VLGC operator. And once it completes a few modifications to its fleet, it will be positioned to ship ammonia to a power-hungry world.

Its stock has been hit hard by declining shipping rates, down 50% from $49.66 in May. However, shipping rates are poised to reverse, which, alongside a new market created by growing hydrogen demand, opens an opportunity to buy the stock at a significant discount alongside a new market created by growing hydrogen demand.

In my latest Capital InFocus report, I dive into Dorian’s fundamentally solid performance and attractive valuations.

It’s an off-the-radar play linked to an up-and-coming elemental energy source.

And priced to perform.

Read the report now.

Think Free. Be Free.

Don Yocham, CFA

Managing Editor of The Capital List