Coal's Lazarus Act Data Centers Spark Unexpected Comeback

• Data centers are driving a surge in power demand, creating potential for unconventional energy sources.
• Babcock & Wilcox's focus on coal and natural gas plants positions it to capitalize on this increased demand.
• Policy shifts, particularly under President Trump, are influencing the resurgence of coal as a viable energy source.
• Investors should consider the risks and opportunities in coal stocks, balancing environmental concerns with potential financial gains.

Alllllrighty Then! A Coal Comeback?

As Ace Ventura, Pet Detective, I usually deal with missing dolphins and kidnapped bats, but this data center boom is so big, even I had to sniff it out. Kenny Young, the big kahuna at Babcock & Wilcox (B&W), tipped me off. This ain't just about finding Snowflake, it's about finding enough power to keep these digital gizmos humming. And guess what? Coal might just be the answer. Coulda fooled me! B&W, a 160-year-old boiler maker turned engineering marvel, is sitting on a $2.7 billion backlog, largely thanks to a deal with Base Electron. Turns out, these data centers need juice, and lots of it. So much for retirement homes and bingo night.

Dot-Com Déjà Vu or a Power Surge?

Some folks are saying this data center craze is just another dot-com bubble waiting to pop. "Don't go in there" as I would say in a dark cave, but I see something else. This is about hard, cold power, and that power needs a source. B&W stock is up 244% this year – talk about making a killing. But I'm late to the party too! Let's not forget Micron, Intel, Sandisk - I'm bringing this to the forefront because timing is everything. We're not talking about a two-bit operation here, it's about the power these behemoths need to operate. If you're thinking about it, now is the time to check out Microsoft Copilot's Report Card Time to Get Serious, it will help you understand the technology better. Alrighty then!

Smokin'! Coal's Unexpected Encore

The elephant in the room? Coal. That dirty, dusty fuel that everyone loves to hate. It used to power half of the U.S. back in 2007, now it's down to 15-17%. But hold your horses, folks. If these data centers keep popping up, we might need 90-100 gigawatts of new energy. That means coal plants might not be heading to the graveyard just yet. President Trump is all about keeping coal alive, viewing it as a national treasure and a security blanket. That's a whole lotta *bleep* if you ask me but politics matter!

B. Riley's Balancing Act

B&W just dropped 10.8 million shares to get their finances in order and gear up for expansion. The deal was a hit, even with B. Riley, a brokerage firm under the SEC's microscope, handling the goods. Wes Cummings, the CEO of Applied Digital, used to be the president of B. Riley Asset Management, which has short sellers crying foul. They're saying the $2.4 billion contract with Base Electron was a trick to pump up B&W's stock. B. Riley owns a big chunk of B&W, so that backlog was a big deal, baby. I'm not trying to throw shade at B&W, but I don't want folks thinking they're swimming in power contracts. Without that Base Electron deal, raising that money would have been tougher than finding a tutu-wearing rhino.

CoreWeave and the Tenuous Web

Applied Digital loses money like I lose track of my car keys. They're worth $12 billion now, but were $1.5 billion a year ago. Late, late, late! A third of their shares are sold short, maybe because of the B. Riley connection. But they've got a relationship with CoreWeave, which accounts for most of their $16 billion backlog. Plus, a 15-year lease with some hyperscaler. That's enough to make them "real" and prop up B&W's stock. B&W also builds natural gas plants, which is a plus. GE Vernova is maxed out, leaving room for B&W to step in. All this is public knowledge, so if you buy B&W, know the deal. It's like wearing white after Labor Day – controversial!

Trump's Coal Crusade

Here's where it gets interesting. B&W is a coal play. They build and maintain coal plants worldwide, even though the world is trying to ditch the stuff. But then came President Trump, with his "Reinvigorating America's Beautiful Clean Coal Industry" order. Beautiful clean coal, huh? That's like saying I have a subtle personality. He's keeping these plants alive, even though they pollute like a skunk at a perfume convention. But they're vital for baseload power and backing up renewables. President Carter pushed for coal plants after the 1970s oil crisis, but now they're getting old. Trump and Energy Secretary Chris Wright are fighting to keep coal afloat, even using emergency powers to stop plant closures. He's basically the anti-Biden when it comes to coal. It's dirty and inefficient, but it's got powerful backers, like the National Coal Council led by Peabody Energy's CEO. Convenient! They're pushing coal as a national security issue. If Wright succeeds, Peabody Energy, Core Natural Resources, and Alliance Resource Partners could win big time. Just be ready for some court battles. Alrighty then!