FedEx's Crossroads: Why Energy Infrastructure is the Real Play in the AI Age

The global supply chain titan FedEx (FDX) has long been a bellwether for economic health. But in Q2 2025, its earnings report revealed a stark truth: even a logistics giant is vulnerable to the cascading effects of energy cost volatility and geopolitical turbulence. With adjusted EPS guidance slashed to $19–$20 and fuel-related costs squeezing margins, FedEx exemplifies a broader vulnerability—businesses unprepared for the energy demands of the AI revolution.

Why Energy Infrastructure is the New "Toll Booth" for Tech Growth
Modern nuclear power plant supporting data centers, symbolizing the synergy between energy infrastructure and AI growth

As AI systems like OpenAI's GPT-5 consume energy equivalent to small cities, the world faces a looming crisis: how to power this transformation without destabilizing economies. Here's where nuclear and LNG infrastructure companies—often overlooked—step into the spotlight. Unlike FedEx, which is a passive victim of external shocks, these firms are positioned as active beneficiaries of AI's energy crunch.

The FedEx Paradox: A Cautionary Tale

FedEx's Q2 struggles highlight three existential risks for non-infrastructure plays:
1. Energy Cost Sensitivity: Rising jet fuel prices (driven by Middle East tensions and supply constraints) eroded margins, despite $540M in cost savings from its DRIVE program.
2. Geopolitical Whiplash: The expiration of its U.S. Postal Service contract and trade disputes with China cut revenue by 1%, while regulatory shifts in data privacy and labor costs added headwinds.
3. Demand Volatility: AI-driven industries like e-commerce and cloud computing require baseload energy stability, which FedEx's variable-cost model can't guarantee.

The Winners: Infrastructure Plays with AI Tailwinds

The real opportunity lies in companies building the energy “rails” for AI's growth. These firms offer three critical advantages:
- Regulatory Tailwinds: Trump's “America First” energy policies fast-track LNG exports and nuclear approvals.
- Inelastic Demand: Data centers and AI labs require 24/7 power, creating “toll booth” revenue streams.
- Hedge Fund Validation: Institutions like Coatue and Viking Global are quietly accumulating stakes in this sector.

1. Dominion Energy (D): The Grid's Unsung Hero

• Why It's Undervalued: Trading at 17x forward P/E with a 4.2% dividend, Dominion has 20-year contracts supplying nuclear power to hyperscale data centers.
• Cramer's Angle: “Dominion isn't a gamble—it's a sure bet for the energy backbone of AI,” the Mad Money host recently noted.
• Growth Catalyst: Its Cove Point LNG terminal is expanding capacity, tapping into Europe's post-Ukraine war energy needs.

2. Oklo (OKLO): Nuclear's Disruptor

• The AI Connection: Backed by OpenAI's Sam Altman, Oklo's small modular reactors (SMRs) can be deployed near data centers, offering carbon-free power at 50% lower costs than traditional plants.
• Valuation Play: At $9B valuation, Oklo is 30% undervalued compared to peers like NuScale (SMR), which surged 100% in Q2.
• Policy Boost: The U.S. Nuclear Regulatory Commission fast-tracked permits for Oklo's Idaho plant, a first for SMR technology.

3. Vistra Corp (VST): The LNG/Nuclear Hybrid

• Hedge Fund Play: Despite a 7M-share reduction by some funds, Vistra's 21% stake in Cheniere Energy's Corpus Christi LNG terminal positions it to profit from Europe's LNG demand.
• AI's Appetite: Its 1.2GW nuclear fleet supplies Alphabet's data centers in Texas, locking in long-term pricing.
• Risk Mitigation: Unlike FedEx, Vistra's 4.5x debt-to-equity ratio is half that of traditional utilities.

Cramer's Contrarian Call: FOMO on Infrastructure, Not Tech

Jim Cramer's recent warnings crystallize the shift: “Don't chase overhyped AI stocks—buy the energy enablers.” While investors flock to nebulous “AI concepts,” infrastructure plays offer:
- Stable Cash Flows: Dominion's 2.5% yield vs. FedEx's 0.9% dividend.
- Geopolitical Hedge: LNG exporters like Dominion and BWX (notably absent from FDX's supply chain) benefit from U.S. energy dominance.
- AI's Hidden Costs: Every data center needs 24/7 power—making nuclear/LNG firms the unsung heroes of this revolution.

The Investment Thesis: Pivot to Energy Toll Booths

A drone view of Dominion's LNG terminal with solar arrays and data center infrastructure

Buy Now or Pay Later:
- Dominion Energy (D): Target $85/share (20% upside from $70.50).
- Oklo (OKLO): Early-stage, but a $12B valuation by 2026 is achievable.
- Avoid: FedEx's stock, which faces a 15% downside risk if energy costs spike again.

Final Analysis: Energy is the New Gold

FedEx's struggles underscore a truth: in the AI era, energy infrastructure isn't a backwater—it's the new gold standard for growth. As global tensions and data demand collide, investors ignoring nuclear/LNG plays risk missing the next megatrend. The time to buy “boring” infrastructure stocks is now—before the FOMO crowd catches on.

Action Plan:
1. Add Dominion Energy (D) to your portfolio for steady income and growth.
2. Take a speculative position in Oklo (OKLO) for exponential upside.
3. Avoid chasing FedEx (FDX) until energy costs stabilize—a move that may never come.

The AI revolution isn't about algorithms—it's about the energy to power them. The infrastructure plays are already winning.