Listen to the audio version of this article (generated by AI).
Hello, Reader.
Contrarian investing naturally draws a lot of heat for going “against” market trends, and sometimes for good reason. Simply being a contrarian without purpose is a losing strategy.
That is why, although some of my recommendations can seem “against” the grain, I consider myself an opportunistic investor.
Many of the most successful investment recommendations of my career came from stocks that Wall Street had written off or overlooked. They were down-and-outers that most investors were avoiding or ignoring.
For example, in June 2017, I recommended buying SolarEdge Technologies Inc. (SEDG) and selling The Kraft Heinz Co. (KHC). At the time, Wall Street was overwhelmingly bearish on SolarEdge and bullish on Kraft.
The results?
One year later, SolarEdge was up 139%, while Kraft was down 24%.
Four years later, SolarEdge had soared 1,282%, while Kraft was still down 42%.
And this is just one of many examples.
The lesson is simple: I’m not looking to go against the crowd just for the sake of being different. I’m looking for opportunities where the potential reward outweighs the risk – particularly when a catalyst could help turn an overlooked company or sector around.
That’s the same lens I’m applying to the AI boom today.
Artificial intelligence is perhaps the largest market trend in history. While many investors have made incredible profits from leading companies developing AI, such as Nvidia Corp. (NVDA) and Amazon.com Inc. (AMZN), the physical ingredients essential to building out this technology are becoming increasingly scarce.
And that’s exactly where I’m putting my attention: on the companies supplying the resources AI desperately needs.
In today’s Smart Money, I’ll show you why the raw materials behind the AI boom could be one of its most overlooked opportunities.
Then, like a nesting doll, I’ll reveal a hidden play within that overlooked theme – a turnaround opportunity hiding one layer deeper.
From the Obvious Trade to the Overlooked One
If power is the blood circulating through data center infrastructure, metals are the bones. In effect, every ton of metal pulled from the ground is a claim on the AI buildout.
This is important because AI’s explosive growth is creating a bottleneck in the raw materials needed to build it. Unlike software-as-a-service (SaaS) vendors or chip designers, metals companies don’t need to guess which AI model wins or which agent framework dominates; they just need to deliver the raw materials that make the entire ecosystem possible.
The “obvious” trade here has been copper, due to its vital role in data centers and power grids, both of which require large quantities of metal for electricity. For example, to sustain current growth, we need to mine as much copper in the next 18 years as in the past 10,000 years combined.
Copper itself reached record prices in late 2025, and has remained elevated in 2026. The Global X Copper Miners ETF (COPX), which tracks global companies involved in the exploration, mining, and refining of copper, is up almost 100% in the last year.
But there’s a less obvious trade to be made…
Aluminum demand is also accelerating.
Every high-voltage line that feeds an AI data hub consumes one to two tons of aluminum per megawatt delivered. Each new stretch of long-distance transmission deepens the world’s appetite for this versatile metal. From 104 million tons of demand in 2024 to an estimated 120 million by 2030, global aluminum consumption is set to grow almost as relentlessly as copper’s.
That’s the demand side of the equation. The supply side is where things get interesting.
Why the Smelters Are Restarting Now
Western aluminum production has become profitable enough to restart some idled smelters, the furnaces used to melt raw materials.
Two such smelters are set to come back from the dead: Magnitude 7 Metals’ New Madrid smelter in Missouri and Norsk Hydro ASA’s (NHY.OL) Slovalco smelter in Slovakia.
The facilities closed in 2024 and 2022, respectively, because aluminum prices were too low and electricity costs had become too high.
Now, the market has shifted from years of overcapacity to a much tighter supply environment, improving the economics of bringing some idled capacity back online. And creating an opportunity for these “zombie” smelters to come back to life.
New Madrid plans to start a 75,000-ton-per-year potline by the end of the year, with the possibility of further ramp-up in 2027. Slovalco, owned by both Hydro and Penta Investments Group, also plans to restart 75,000 tons of capacity, with the remaining 100,000 tons depending on external conditions after 2030.
But that’s not all. There is already proof in the aluminum pudding.
While New Madrid and Slovalco are preparing to restart aluminum production, the revival is already underway in South Carolina.
Last month, Century Aluminum’s Mt. Holly smelter in the Palmetto State announced that it has officially returned to full capacity. Aiming to produce about 50,000 more metric tons per year, Century Aluminum CEO Jess Gary said it will increase the country’s aluminum output by 10%, adding to the 30% the aluminum producer already accounts for.
Aluminum’s rising demand is evident in its price. The U.S. delivery premium has surged to roughly $2,450 per ton above the London Metal Exchange (LME) basis price. Meanwhile, the LME basis price is increasing, climbing from $2,200 per ton at the beginning of 2024 to $3,305 now.
Together, these developments point to a market undergoing a shift. Aluminum producers are bringing capacity back online, just as demand for the metal is accelerating.
This is exactly the kind of setup I look for: an industry where the fundamentals are improving, but where the market may not yet fully appreciate the opportunity.
And it brings me back to the investment philosophy I outlined earlier…
Where Contrarian Meets Opportunity
I am simply looking for a catalyst that could drive a recovery. And more often than not, the biggest catalysts aren’t found in the industries or companies that everyone’s already watching.
They’re found in what those companies desperately need.
Right now, that is raw materials. And within that overlooked theme, I believe aluminum offers an especially interesting opportunity.
But that metal is just one opportunity hiding in plain sight. Silver, platinum, palladium, aluminum, and lithium are all necessary physical components for the continued AI boom. And as demand for raw materials rises, so, too, could the opportunities for the companies supplying them.
That’s why,in my , I name five stocks that I believe could benefit from rising demand for these critical materials.
They include:
- A major uranium producer powering the nuclear renaissance
- A global mining giant with major exposure to iron ore and other critical metals.
- A leading copper and zinc producer, with a growing portfolio of copper projects.
- A diversified miner producing manganese, nickel, lithium and mineral sands.
- A growing copper producer with operations in Brazil and additional exposure to gold.
These are companies tightly correlated with rising demand for raw materials.
That, ultimately, is what my approach is all about. Not simply going against the crowd, but identifying where the next opportunity could emerge before the rest of the market catches on.
Regards,
Eric Fry
