der_thomas/iStock via Getty Images My primary focus is the oil and gas industry. When I started researching Texas Pacific Land ( TPL ), I assumed I was analyzing an oil royalty company. After a short read, I knew this was going to be something else—a data center story wearing an oil mask. Morpheus offered me a blue and a red pill. I took a red one. After a week of water physics, aquifer law, and t...
der_thomas/iStock via Getty Images My primary focus is the oil and gas industry. When I started researching Texas Pacific Land ( TPL ), I assumed I was analyzing an oil royalty company. After a short read, I knew this was going to be something else—a data center story wearing an oil mask. Morpheus offered me a blue and a red pill. I took a red one. After a week of water physics, aquifer law, and turbine thermodynamics study, this article summarizes what I found at the bottom of the rabbit hole. The West Texas data center story might not be new to many Seeking Alpha investors. LandBridge ( LB ) has roughly tripled in share price since its 2024 IPO. I’m including LB in this analysis as it repeatedly appeared during my study. The same surface rights business model on neighboring acreage and the same data center thesis. TPL is trading at a 44x forward PE ratio. Both stocks are rated as AI infrastructure plays. The market knows about the Texas brackish water, cheap gas, and other advantages. Anyone still modeling TPL as an oil royalty company doesn’t understand the story. The question now is: What do the current elevated multiples imply? How many data centers must be built on these companies' acreage for us to make a return on our investment? At the current LB’s market cap of $5.5 billion and TPL’s $28 billion, the market expects a certain amount of gigawatts of data center capacity to be installed on these companies’ lands. In this article, I am going to work backward, from the market cap to the implied GW needed to justify the stock price, and discuss whether the pipeline can deliver it. Don’t Conflate Surface and Mineral Royalties I saw many investors conflating surface royalties with mineral royalties. These are not the same things. Mineral royalty companies like Viper Energy ( VNOM ) have rights to a part of the mineral production from beneath the ground. They own the resource. Surface royalties give you something different. It’s the ownership of the land itself in ...
South Korean memory chip titan SK Hynix is making its Nasdaq debut, giving U.S. investors direct access to Nvidia Corp.’s (NASDAQ:NVDA) top memory supplier. But despite this listing, Futurum Equities’ Chief Market Strategist Shay Boloor is sticking with domestic rival Micron Technology Inc. (NASDAQ:MU), citing structural instability in the Korean markets as a major deterrent. The ‘Extreme’ Memory ...
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