AI & Oil: A Mostly Harmless Investment Guide

The universe, as anyone who’s accidentally glanced at a spreadsheet knows, is a profoundly complicated place. And right now, one of the complications is oil. It’s sloshing around, becoming more expensive, and generally causing a bit of a fuss. This, naturally, affects almost everything, including the increasingly pervasive world of Artificial Intelligence. Now, AI doesn’t directly guzzle oil like a particularly thirsty dinosaur (though one can’t entirely rule it out in the more advanced models), but it does require a frankly astonishing amount of electricity. And electricity, as we’re repeatedly reminded, often involves things that come from, well, let’s just say ‘dark, mysterious places’ involving oil. (It’s a whole thing. Don’t look into it too closely.)

So, the question is, can anything in the AI sector escape this rather sticky situation? The answer, as is so often the case, is ‘mostly’. There are a few companies that, through a combination of clever design and sheer luck, might just weather the storm. Or at least, not sink quite as quickly as others. We shall investigate.

Nvidia

Nvidia (NVDA 1.02%) appears, at first glance, to be a rather precarious bet in the current climate. After all, they make those little silicon brains – AI accelerators – that power the data centers which, let’s be honest, are essentially enormous, electricity-hungry boxes. And those boxes require energy. And that energy… well, you get the picture. Furthermore, the plastics used in the packaging of these chips are, regrettably, derived from oil. (A tragic irony, really. The future is built on the remnants of ancient marine organisms.)

However, there’s a subtle distinction here. Nvidia isn’t actually making the chips. They’re designing them. The actual, messy business of turning those designs into physical reality falls to companies like Taiwan Semiconductor Manufacturing, who are, shall we say, closer to the oil-soaked gears of production. (Think of Nvidia as the architect and TSMC as the construction crew. One designs the palace, the other gets covered in mud.) This means Nvidia is somewhat insulated from the immediate impact of rising oil prices. Plus, demand for their AI accelerators is so high that they can pretty much charge what they like. (It’s a lovely position to be in, really. Like being a particularly talented wizard who sells spells at exorbitant prices.)

In fiscal 2026 (ended Jan. 25), they raked in a rather impressive $216 billion in revenue – a 65% jump year over year. Analysts predict continued growth, with a 70% increase forecast for fiscal 2027 before slowing to a still-respectable 27% the following year. That’s a lot of silicon brains. (One wonders if they’re plotting something.)

Even if that growth slows, investors might be forgiving, considering a price-to-earnings (P/E) ratio of 37 and a forward earnings multiple of 22. That’s a valuation that suggests a certain degree of optimism. (Or perhaps a collective delusion. It’s hard to tell.)

Meta Platforms

Like Nvidia, the advantages of Meta Platforms (META 1.46%) aren’t immediately obvious. They’re building a lot of data centers. A truly astonishing number, in fact. This, naturally, will require a significant increase in energy consumption. (Think of it as building a digital empire, one kilowatt-hour at a time.)

However, there’s a time element at play. Several years from now, the global energy landscape could be radically different. (Perhaps we’ll all be powered by hamsters. It’s not entirely implausible.) This buys Meta some time to manage the rising costs. (Or at least, to pretend to manage them.)

For the present, though, Meta’s energy needs appear relatively tame. This is largely because almost 3.6 billion people log on to at least one of their apps every day. (That’s a lot of scrolling. A truly terrifying amount, when you think about it.) For now, they’re primarily a digital advertising company. (Which is a slightly less energy-intensive activity than, say, building a rocket ship.)

In 2025, they generated almost $201 billion in revenue, a 22% increase compared to 2024. Of that, over $196 billion – a staggering 98% – came from digital advertising. Analysts forecast a 25% revenue increase for 2026, suggesting that this reliance on ads is unlikely to change quickly. (Which is either a good thing or a terrifying thing, depending on your perspective.)

Ultimately, at a P/E ratio of 27 and a forward P/E of 21, Meta investors are less likely to panic about a bump in energy prices. That valuation provides a degree of downside protection as AI becomes a more significant revenue source. (Which is reassuring, unless you believe that AI is secretly planning to take over the world.)

2026-03-20 15:52

Nvidia

Meta Platforms

Read More