According to Bank of America (BofA), the boom surrounding artificial intelligence (AI) is not limited to tech stocks. The firm’s strategists point out that the rapid expansion of data centers requires enormous amounts of energy and raw materials – especially copper. The argument is that anyone wanting to participate in the dynamics of the AI wave should not only look at classic technology stocks: the raw materials sector will become an indirect beneficiary of the increasing demand from the digital infrastructure.
AI Drives Copper Demand
The analysts summarize the trend as “Artificial intelligence devours raw materials.” Behind this exaggeration is a simple logic: every new data node requires high-performance power connections, cooling, and network connections – areas in which
Against this background, BofA argues that stocks from the raw materials and mining sector can be a more cost-effective and diversified way to participate in the AI trend than the concentrated bet on highly valued mega-caps. Mining stocks have already performed better overall than large tech benchmarks. However, the view to the future is decisive: with each additional data center, the need for conductive materials grows – and thus the structural importance of copper for the digital economy.
BloombergNEF (BNEF) quantifies this trend in a report: According to the report, AI-related copper consumption will average around 400,000 tons per year in the coming decade, reaching a preliminary peak of 572,000 tons in 2028. In the next few years, the data center industry’s demand will amount to more than 4.3 million tons, according to BNEF. Copper is thus developing into a connecting building block between data technology and energy infrastructure.
Supply Side under Pressure: Looming Gap in Copper
The demand outlook meets a supply situation that can only keep pace with the tempo to a limited extent. BNEF expects global copper production to grow to 29 million tons by 2035. At the same time, the analysis forecasts a demand surplus: worldwide, a gap of around six million tons could arise by 2035.
This constellation – accelerated demand from AI-driven data centers with simultaneously limited supply growth – puts the market under structural pressure. According to Bloomberg, copper can account for up to almost 6% of the investment expenditure of a data center project. Rising project numbers thus have a direct impact on material demand. In an environment of tight supply and growing purchase quantities, the reporting also mentions a possible price level: the copper price could reach the mark of 13,500 US dollars per ton by 2028, it says.
This situation is of central importance for the industry. It influences investment decisions along the entire value chain – from mining companies to suppliers of energy infrastructure to operators of large-scale data locations. At the same time, copper is thus moving even more into the focus of market participants who have so far primarily perceived technology stocks as direct AI winners.
What Does this Development Mean for the Market and Companies?
For the copper market, the figures paint a picture in which AI is joining as a new, permanent demand block. In addition to existing drivers such as network reinforcements and electric mobility, an additional customer with a long-term perspective is emerging: data centers whose expansion plans are set for years to come. BofA deduces from this that raw material stocks can serve as a supplement to tech exposure. The argumentation is based on two strands: on the one hand, the relative valuation compared to large technology stocks, on the other hand, the direct reference to the physical demand through the AI infrastructure.
For copper itself, the question of supply remains central. BNEF sees production rising by 2035, but at the same time not sufficiently to fully cover the forecast demand. Such gaps typically affect pricing, project planning, and prioritization along the supply chain. The mentioned guideline of up to 13,500 US dollars per ton in 2028 illustrates which tensions can arise from a shortage when demand and supply diverge.
For companies in the value chain, this means that operators of data centers and energy infrastructure must continue to firmly price in copper – both in material procurement and in project calculation, especially since the metal can account for a significant share of the investment costs. Mining companies are faced with the task of reliably implementing projects and optimizing existing capacities. Planning security plays a central role in both cases, as AI-driven demand is not erratic, but continuously increasing.
Whether the forecast supply gap will occur in this order of magnitude by 2035 will depend significantly on the development of new projects, on schedules, and on investments in the energy and network architecture. What is clear is that the structural demand from data centers adds a constant demand pillar to the market. For market observers, copper thus remains a central keyword when it comes to the material basis of the AI age – and to the question of how raw material markets and digital infrastructures mutually influence each other.
The Importance of the Exploration Industry for the Copper Market is Increasing
In our view, exploration companies, which can generally react much faster and discover new deposits, will play an increasingly important role in closing the expected supply gap in the copper market. At Goldinvest.de, we therefore follow a whole series of companies in the sector that we consider promising. This includes, for example, American West Metals (WKN A3DE4Y / ASX AW1) with the Storm copper project in the Canadian Nunavut, which could already go into production in a short time (two to three years) for the mining industry. Altiplano Metals (WKN A2JNFG / TSXV APN), on the other hand, is already producing a copper concentrate at its El Penon plant, for which it also has customers. But the copper explorer Axo Copper (WKN A416BY / TSXV AXO) is also exciting, which recently reported several high-grade drilling results from its Mexican project La Huerta.
On Goldinvest.de there is detailed information on these and other companies as well as on the topic of copper in general.
