Is AI Creating A New Commodity Supercycle?

During their recent episode, Taylor, Carlisle, and John Love discussed Is AI Creating A New Commodity Supercycle?. Here’s an excerpt from the episode:

But yeah, the more parabolic it goes, maybe the sooner we get to that point. As for commodities, yeah, I mean, I’ve got basically a copper behind me. It’s a fuel for copper, but also so many other things.

Silver is more an industrial metal than a precious metal. It’s critical, but everything, aluminium, nickel, a whole bunch of different commodities. Like I said, natural gas, maybe that doesn’t go through the roof, but there’s probably support for it as we build out data centres.

And the hyperscalers are saying, we want to pay our own way. We’ll build power facilities. I’m not sure how genuine that is, but that’s what they’re saying.

But we think even without the AI story, there’s a lot of support for commodities. When you look at broad commodities, every individual commodity, it’s a rise and fall supply demand, individual supply demand story. You put them together though, and if you allocate in a smart way and rotate in a smart way, I think that can be a real beneficial thing to your portfolio.

So we think unlike the 2010s, which was challenging for commodities, the next five to 10 years look quite positive.

[Tobias] Good for small and micro businesses, good for mid-cap businesses, all of that spend just flowing through the good guys for once.

[Jake] Toby, I’ll give you a little stat to push back on that whole earnings growth story. When I read this, it about made my jaw drop. Q1 2026, three companies, Alphabet, Amazon, and Nvidia reported $69 billion in non-operating other income that counts towards earnings for the S&P 500, which was a 12% increase for the S&P 500 from these three companies.

What did that come from? Marking up their investments in profits. So these are non-cash, it’s just a mark to market game, circularity game.

Can you imagine? Paper profits.