The increasing energy demands of the artificial intelligence sector are reshaping investment priorities, and Energy Transfer LP (NYSE:ET) is poised to benefit from this trend. The company recently announced a strategic partnership with Cloudburst Data Centers to supply natural gas for a major AI-focused data center in Central Texas. This initiative underscores Energy Transfer's commitment to addressing the growing energy needs of the rapidly expanding AI industry.
In a challenging market environment, where Alpha Wealth Funds reported a 7.14% loss in Q1 2025 due to unrest related to the War in Iran, Energy Transfer's stability stands out. The firm’s investment letter revealed a shift towards long-term value opportunities, particularly focusing on companies that will benefit from infrastructure developments tied to AI. With its diverse portfolio of natural gas pipelines and storage facilities, Energy Transfer aligns well with this strategy.
As of May 21, 2026, Energy Transfer shares were trading at $20.01, showing a one-month return of 4.87% and a 12.10% increase over the past year. With a market capitalization of $68.86 billion and a dividend yield of 6.98%, the company is not just weathering the storm; it is strategically positioning itself for future growth. Management has noted they are evaluating requests to connect to about 200 data centers across 14 states, which further bolsters its prospects in the AI sector.
Market Implications and Future Outlook
The partnership with Cloudburst Data Centers reflects a broader trend in the energy sector, as traditional companies adapt to the demands of emerging technologies. As the need for AI infrastructure grows, energy suppliers will face increasing pressure to deliver reliable and sustainable energy sources. This shift offers both challenges and opportunities for Energy Transfer, establishing it as a key player in the supply chain for AI technologies.
Although Energy Transfer is not among the 40 most popular stocks among hedge funds as 2026 approaches, it remains a significant player in energy supply. At the end of the fourth quarter, 30 hedge fund portfolios included Energy Transfer, a decrease from 35 in the previous quarter. This drop may indicate a cautious stance from hedge fund managers, who are increasingly focusing on AI stocks perceived to have higher growth potential.
The Competitive Landscape
Despite Energy Transfer's solid fundamentals, analysts are also looking at other stocks within the AI sector that might offer greater upside. Investment sentiment favors AI-centric companies that could yield substantial returns more quickly. Recent communications from Alpha Wealth suggest a recognition of the need to reevaluate long-term strategies in response to changing market dynamics.
Energy Transfer's ongoing strategic initiatives highlight its potential for growth amid the AI infrastructure boom. As the company expands its operations and adapts to new market demands, it remains a crucial entity to monitor, especially as the intersection of energy and technology evolves.
While the AI sector is driving significant changes in energy needs, Energy Transfer's proactive strategy and established infrastructure may give it a competitive advantage. The company's ability to navigate these developments will be essential for its long-term success.
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