AI Infrastructure Is Becoming a Windfall for Commodities

Metals and energy demand are rising as AI data centers scale globally.

AuthorAuthor

Simon Berry & Andrew Hecht
February 03, 2026

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🕒 Market Overview: The growing AI demand for metals and energy, and the decline in fiat currencies’ purchasing power favor the upside for metals, energy, and the XME ETF.

📈 Sector Insight: Risk-reward favors the XME $130-$160 vertical bull call spread at $10 per spread in the current environment. I expect the trend of higher lows and higher highs to continue in 2026 and beyond as technology companies’ demand for the critical AI infrastructure commodities continues to soar.

💡 Today's Trade Idea: Bull Call Spread on XME.


SMART TRADE IDEA 💡

Bull Call Spread on XME

Trade Setup: Buy $130 Call / Sell $160 Call, January 15, 2027, expiration.

Cost: $10.00 ($1,000 per spread)

Max Profit: $20.00 ($2,000 per spread)
Breakeven: $140.00 on SPY on January 15, 2027
Risk-reward: 1:2.0

Management Plan: Take profits, or roll up if XME’s price reaches $150 before January 15, 2027.

 

NOTE: Remember, options trading involves substantial risk and is not suitable for all investors. Consider your investment objectives, financial resources, and experience level before implementing this or any options strategy.

DISCLOSURE: Trade recommendations may have changed since publication. Evaluate current market prices and risk/reward before acting. Trading involves significant risk and is not suitable for everyone. This is not personalized investment advice. Past performance doesn't guarantee future results. Publisher and contributors may hold positions in recommended securities. Readers assume full responsibility for their trading decisions. Consult a financial professional before investing.

Andy Hecht | Smart Analysis

A Wall Street veteran and analyst covering technical and fundamental factors in markets across all asset classes for over four decades.

What AI actually looks like IRL

AI Infrastructure Spending Could Boost Commodity Prices and Mining Shares

In computer science, Artificial intelligence, or AI, is the hottest field. The technology sector is working furiously to create machines and software capable of performing tasks that can replace human intelligence. The sector is investing massive capital in AI development. Gartner, a business and technology insights company, recently reported that worldwide AI spending is forecast at $2.52 trillion in 2026, a 44% increase from 2025.

The forecasts and breakdown for AI spending from 2025 through 2027 by category are as follows:

Source: Gartner

The chart shows that the largest spending category is AI infrastructure, accounting for over half the total spending from 2025 through 2027. AI infrastructure increases demand for strategic metals across the precious, nonferrous, and ferrous categories, along with rising energy demand.

A Supercycle for metals and energy could continue

Demand for a wide range of metals has grown amid rapid expansion in spending on artificial intelligence infrastructure.

Copper, the nonferrous metal that Goldman Sachs called “the new oil” in 2022, is essential for electrical wiring, power distribution, and data center cooling systems.

Aluminum, another nonferrous metal, is a suitable substitute for copper in wiring and for server racks and cooling plates in data centers.

Silver is the most conductive metal, making it critical for complex circuitry and high-end processors in AI data centers.

Steel, a ferrous metal, will be in greater demand for the structural construction of AI data center campuses.

Gold and platinum are useful for wire bonding and plating in high-value AI hardware because they are conductive and corrosion-resistant.

Traditional and non-traditional energy commodities, including oil, gas, coal, uranium, and biofuels, are necessary for powering the growing number of AI data centers.

 The bottom line is that AI growth increases the demand side of many commodities’ fundamental equations.

Metal prices have soared

Gold prices moved 64.37% higher in 2025, closing last year at $4,341.10 per ounce. At $4,900 on January 30, gold was over 12.8% higher than the price on December 31, 2025. Gold posted its tenth consecutive quarterly gain early in Q1 2026. Meanwhile, silver’s price rose an incredibly 141.44% in 2025, settling last year at $70.603 per ounce. At over $85 on January 27, silver prices continue to soar, up more than 20% in early 2026. Gold and silver are screaming that fiat currency values and purchasing power are declining at a furious pace. Meanwhile, prices have declined from the most recent January highs of over $5,600 for gold and over $120 per ounce for silver.

Gold and silver are not the only metals that have experienced significant rallies during the first month of 2026.

LME copper forwards and COMEX copper futures rallied over 41% in 2025, settling at $ 12,423 per ton and $5.682 per pound, respectively, on December 31, 2026. At $13,618 per ton on January 29, the LME copper forwards were 9.6% higher in early 2026. COMEX copper futures at $5.9240 on January 30 were 4.3% higher than the 2025 closing level. Copper futures moved to a new record high of over $6.50 per pound in January 2026 before correcting.

LME three-month high-grade aluminum forwards moved 17.4% higher in 2025, settling the year at $2,995.50 per metric ton. At $3,218.50 on January 29, the aluminum forwards were 7.3% higher in 2026.

Meanwhile, steel prices have moved higher in early 2026. The bottom line is that precious, nonferrous, and ferrous metals prices have rallied in 2026 from lofty levels at the end of 2025.

Mining shares can provide leverage to metals prices

Companies that extract ores and process them into metals deliver leveraged returns during bull markets because they can mine lower-grade ore. Moreover, rising prices for byproducts, such as rare and precious metals, add to their revenues and profits.

The top holdings of the State Street SPDR S&P Metals & Mining ETF (XME) include:

XME holds a diversified portfolio of metals and energy mining companies with the following breakdown:

XME sector holdings include precious, nonferrous, and ferrous metals, as well as energy, all of which are critical to AI infrastructure. 

The XME ETF- A Trade Recommendation

At $117.63 per share, XME is a highly liquid ETF with $4.766 billion in assets under management. XME trades an average of over 3.28 million shares daily and charges a 0.35% management fee. The $0.39 dividend yields 0.33%.

Source: Barchart

The chart shows the explosive rally in XME since the Q2 2025 low of $45.89 per share. In January 2025, XME reached a record high of $135.68. XME has made higher lows and higher highs since the Q1 2016 low of $11.38 per share.

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