🕒 Market Overview: Bloom Energy surges on Brookfield's infrastructure commitment, signaling institutional validation of AI power bottlenecks.

🔄 Sector Insight: Utilities sector reaches record highs as electricity generation emerges as critical AI infrastructure component.

💰 Today's Trade Idea: Bull Call Option position with the potential to enter into a vertical bull call spread over the coming months capitalizes on structural power demand growth with defined risk.

SMART TRADE IDEA

Bull call option on XLU

Trade Setup:  Buy $105, June 18, 2026, expiration

• Cost:  $1.00 ($100 per option)

• Max Profit: Unlimited

• Breakeven:  $106 on XLU at expiration

Management Plan: Sell the XLU $115 call option for June 18, 2026, create a $105-$115 vertical bull call spread for flat.

The growth of AI will have a knock-on impact on many industries, but energy is at the forefront as the technological advances rely on electricity supplies. XLU is an ETF that holds companies crucial for AI and technological growth over the coming months and years. 

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.

The Bookefield Asset Management/Bloom Energy deal is another example of the far-reaching impact of AI. The demand for energy is going to skyrocket as technological advancements increasingly rely on power generation over the coming years.

Electricity generation is a growth industry that will continue over the coming months, years, and decades, which will boost earnings for related companies as cash-rich technology companies look to lock down supplies. Technology is energy-dependent, and energy companies and utilities are critical factors for technological growth, creating a mutually beneficial relationship.

The S&P 500 Utilities Sector SPDR (XLU) owns shares of the leading utilities. At $91.25 per share, XLU had over $21.85 in assets under management. The highly liquid ETF trades an average of 10.475 million shares daily and charges a nominal 0.08% management fee. The $2.31 annual dividend translates to a 2.53% dividend, which covers the expense ratio in only two weeks.

The chart highlights XLU’s bullish trend. While the ETF is trading at a record high, AI investments in electricity-generating companies could push the ETF much higher over the coming weeks and months. The June 18, 2026 $105 call option at $1.00 could have substantial upside potential. Buying the $105 call with the intention of selling the June 18, 2026, XLU $115 call option for $1 or higher creates a vertical bull call spread for no premium outlay, or a credit, with an upside potential profit of $10 (or $1,000 per spread).

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