Coal, Memes, and Megawatts: Where Smart Capital Is Heading Next

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AI, Coal, and the Real Power Trade

Meme stocks are trending again, the Fed is still stuck in no-man’s land, and the market’s brushing off inflation. But the real shift is happening in the physical economy — specifically, in electricity.

Last week, President Trump unveiled a $70–90 billion AI and energy plan in Pittsburgh. Behind the scenes, this wasn’t about politics — it was a signal that power is now an economic bottleneck, and investors are starting to notice.

Key players at the summit included Blackstone, Chevron, Palantir, and Anthropic. They weren’t there to talk innovation. They were there to talk infrastructure.

Anthropic submitted a request to the White House for 50 gigawatts of dedicated power by 2027 — roughly the capacity of 25 Hoover Dams. OpenAI and Meta echoed that, calling for Defense Production Act powers to fast-track gas turbines and high-voltage transmission.

The administration responded with policy alignment:

• Fast-tracked permitting

• New incentives for fossil fuel generation

• Executive orders to build data centers on federal land

In short, the tech narrative is now running into physical constraints. That changes the investment map.

Stock of the Week: Alliance Resource Partners (ARLP)

Sector: Coal & Infrastructure | Market Cap: ~$2.5B
Dividend Yield: ~13% | Theme: Baseload Energy and Grid Security

ARLP isn’t a flashy trade — and that’s the point. As the second-largest coal producer in the U.S., it supplies baseload power to the exact utilities facing new demand from AI data centers, electrification, and geopolitical shifts.

While ESG flows have crowded out attention from fossil names, the power grid doesn’t run on narratives — it runs on reliability. Coal plants may be politically unpopular, but they’re operationally essential.

Why ARLP matters now:

• Producing consistent cash flow with low capex needs

• Forward yield of over 13%, well-covered by cash

• Benefiting from a rebound in U.S. coal exports (+17% YoY)

• Multi-year contracts lock in pricing stability

• Minimal leverage with long-term demand visibility

If grid reliability becomes the constraint on AI expansion — and every signal points to that — then names like ARLP quietly become essential infrastructure.

Meme Stocks Are Back. But That’s Not a Strategy.

This week, Krispy Kreme (DNUT) spiked 27% in a day. GoPro (GPRO) is up 80% YTD. Kohl’s and Opendoor briefly joined the frenzy before reversing.

Sound familiar?

WallStreetBets is back in the headlines, but the fundamentals haven’t changed:

• Krispy Kreme paused its dividend and reported declining sales

• GoPro has missed revenue estimates and is still pivoting

• Kohl’s remains a structurally challenged brick-and-mortar retailer

This is speculative flow-chasing — not investing. And while short squeezes can create momentary gains, the overwhelming evidence shows that meme stocks underperform quality factor names over 6–12 month periods.

The common traits:

• High short interest

• Social media momentum

• No real earnings power

• Retail crowd providing exit liquidity for insiders

The point isn’t to mock the movement. It’s to make a distinction:
Smart capital isn’t chasing volatility. It’s reallocating toward assets that solve real problems.
And right now, the power grid is one of those problems.

Market Snapshot (July 21-25)

S&P 500: ~6,302 (via SPY $630.26; +0.2%)
Nasdaq 100: ~23,201 (via QQQ $560.17; slightly down intraday)
Dow Jones: ~44,696 (via DIA $446.96; modest gain)
Bitcoin: ~$117,993 (‑0.38% intraday fade)
10‑Year Treasury Yield: ~4.36% (recently ticked up)

June CPI: +2.7% YoY (May was +2.4%); Core CPI +2.9% YoY, +0.3% MoM
June Retail Sales: +0.6% MoM (above +0.2% consensus)
July Empire Manufacturing: +5.5 (vs –16 prev

What’s Driving Markets Now

• Bond yields are creeping higher despite softer core inflation—10‑year yield just over 4.3%, resisting dovish expectations

• Equities remain near all-time highs, buoyed by continued trade deal optimism (Japan/Philippines) and resilient consumer spending.

• Fed fund futures now imply ~40–45% odds of one rate cut by November—down from ~63% before June CPI.

• Strong foreign demand for U.S. Treasuries (e.g. Japanese investors ~$60bn) is offsetting domestic fiscal pressures

Forward View: Week of July 28

Key Earnings

• Netflix (NFLX) – Tue, Jul 29

  • Watch for metrics on password‑sharing crackdowns and content engagement. Expect modest subscriber growth; margins may compress.

• Goldman Sachs (GS) – Wed, Jul 30

  • Fixed‑income activity, commentary on IPO pipeline, and equity issuance appetite will be focal.

• Taiwan Semiconductor (TSM) – Thu, Jul 31

  • Earnings will provide insight into global AI chip capacity, data‑centre demand, and broader semiconductor trends.

Macro Calendar

• Thu, Jul 31: Initial Jobless Claims, Durable Goods Orders, New Home Sales

• Fri, Aug 1: Final University of Michigan Inflation Expectations & PCE Preview chatter (expect intraday volatility)

Fed Commentary

• Watch remarks from Jerome Powell and other Fed officials mid‑week. Expect emphasis on data‐dependency amid diverging bond/equities trends.

Commodities & Trade

• Oil prices are creeping higher due to renewed shipping issues in the Red Sea. Diesel spreads and East‑West shipping rates warrant watching.

The Fed remains in a bind between sticky inflation signals (e.g. 10‑year yields persist >4.3% and inflation expectations slightly eased but remain elevated) and mixed macro data (strong spending vs. softening indicators). The market still leans towards a soft landing, though rising yields suggest skepticism. Upcoming earnings and macro data this week will be critical in determining the durability of current trends.

Final Words

Markets are treating energy and infrastructure as political sideshows. But smart investors know better. Grid stability is now a competitive moat. Coal is still producing nearly 20% of U.S. electricity, and AI’s growth curve makes that harder to replace — not easier.

While the crowd plays the meme game for the third time in four years, smart money is positioning for structural bottlenecks.

Power is capital. And in this cycle, it’s getting repriced.

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Disclosures: This newsletter is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always conduct your own due diligence or consult with a financial advisor before making investment decisions.