Everyone knows the giant companies supporting AI. Nvidia (Nasdaq: NVDA), Microsoft (Nasdaq: MSFT), and Alphabet (Nasdaq: GOOG) are just a few of the household names.

At this point, those Mag 7 stocks are crowded trades.

To make money from AI, investors have to look in places where most others haven’t.

In Parts 1 and 2 of this series, I discussed companies that own land and water rights, which will be important to data center build-outs.

But it all starts with energy.

Without cheap, reliable energy, data centers don’t run, and AI (as well as many other technologies) lies dormant.

We’re going to need a lot of energy.

OpenAI said that in the next eight years, it wants to build 250 gigawatts of new computing power. No big deal – just 20% of all of America’s current electricity-generating capacity.

The electricity generator to take note of is Black Hills (NYSE: BKH). Based in Rapid City, South Dakota, it serves 1.35 million customers in eight states, including Wyoming, which is becoming a hotbed for data center construction.

It is also in the process of acquiring NorthWestern Energy (Nasdaq: NWE), which will add an additional 800,000 customers.

Black Hills counts tech giants Microsoft and Meta Platforms (Nasdaq: META) among its data center clients. It will also supply electricity for a new 115-acre data center campus in Cheyenne.

The regulatory framework under which Black Hills operates allows it to provide low-cost electricity to data center operators – an important fact considering that the president wants data centers to pay higher prices for electricity.

Black Hills also pays a solid 3.9% dividend yield and has raised its dividend every year since 1971. That’s an impressive track record.

The company just raised its dividend last week to $0.703 per share. Shareholders of record as of February 17 will receive their dividends on March 1.

Black Hills is a great way to generate income while owning a company that feeds the data centers what they’re hungry for: energy.

— Marc Lichtenfeld

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Source: Wealthy Retirement