Why Safe Bulkers (SB) Is a Hidden Buy in the Energy-Driven AI Infrastructure Boom

In the shadow of the artificial intelligence (AI) revolution, a quiet but critical sector is poised to benefit: infrastructure. Specifically, dry bulk shipping—often overlooked by investors—plays a pivotal role in transporting the raw materials that power the AI boom. Safe Bulkers (SB), a global dry bulk shipping company, is emerging as a strategic, undervalued play in this transformative landscape. By analyzing the interplay between AI-driven energy demand, geopolitical tailwinds, and SB's operational resilience, this article argues that the company is uniquely positioned to capitalize on long-term structural trends.

The AI-Driven Energy Surge: A Tailwind for Bulk Commodities

Artificial intelligence is reshaping global energy consumption. According to the International Energy Agency (IEA), data centers—driven by AI—will consume 90 terawatt-hours (TWh) of electricity by 2030, quadrupling current levels. This surge is fueled by energy-intensive processes like training large language models (LLMs), which require vast amounts of power. While renewables are part of the solution, coal and natural gas will remain critical in the short to medium term, particularly in emerging economies where infrastructure development and industrialization are still nascent.

Safe Bulkers operates in the heart of this demand chain. The company's fleet transports coal, iron ore, and other bulk commodities essential for energy production and infrastructure expansion. For example, coal remains a primary energy source in countries like India and China, where AI-driven industrialization is accelerating. Similarly, iron ore is indispensable for steel production, a cornerstone of AI-powered infrastructure projects. As AI adoption intensifies, the need for these commodities—and the shipping capacity to move them—will only grow.

SB's Strategic Positioning: Fleet Renewal and Environmental Compliance

Safe Bulkers has proactively positioned itself to thrive in a future shaped by AI and sustainability. The company's fleet renewal strategy includes 12 IMO Phase 3-compliant vessels, such as the Kamsarmax-class Efrossini, and an orderbook for six newbuilds, including two methanol dual-fueled ships. These investments align with global environmental regulations and position SB to meet the demand for cleaner energy infrastructure.

The company's financial discipline further strengthens its appeal. As of May 2025, SB held $122.2 million in cash and $127.6 million in undrawn borrowing capacity, providing flexibility to navigate volatile markets. Despite a 21.3% decline in Q1 2025 net revenues, SB maintained a robust dividend policy and executed a 2.8% share repurchase program. These actions signal management's confidence in the company's long-term prospects.

Geopolitical Tailwinds and Market Resilience

Geopolitical factors are amplifying the demand for dry bulk shipping. The Red Sea crisis, for instance, has disrupted traditional trade routes, forcing cargo owners to seek alternative paths and increasing demand for Capesize vessels that can navigate longer distances. SB's Capesize fleet, which generates an average daily charter hire of $23,317 (well above the fleet average), is particularly well-suited to capitalize on such disruptions.

Moreover, the U.S.-China trade tensions and potential tariffs on Chinese ships could shift demand toward U.S.-listed shipping companies like SB. The company's focus on period time charters—longer-term contracts that provide stability—further insulates it from short-term market fluctuations.

Data-Driven Validation: SB's Undervaluation and Growth Potential

Safe Bulkers' stock appears undervalued relative to its fundamentals and the broader industry. As of July 2025, the company trades at a price-to-earnings (P/E) ratio of 8.5, significantly below the average of 12.3 for its peers in the Dry Bulk Shipping industry. This discount reflects market skepticism about near-term earnings, despite the company's strong balance sheet and long-term growth drivers.

The Baltic Dry Index, a key indicator of global shipping demand, has shown signs of stabilization in 2025, suggesting a potential rebound in freight rates. If AI-driven energy demand continues to outpace supply, the BDI—and by extension, SB's earnings—could see a meaningful uptick.

Risks and Mitigation

While the thesis is compelling, investors should consider risks such as fuel price volatility, regulatory changes, and geopolitical shocks. However, SB's fleet modernization and debt management practices mitigate these risks. The company's methanol dual-fueled newbuilds, for example, reduce exposure to volatile oil prices, while its low debt-to-equity ratio (0.45 as of Q1 2025) provides a buffer against interest rate hikes.

Investment Thesis

Safe Bulkers represents a rare combination of undervaluation, operational resilience, and strategic alignment with global megatrends. As AI accelerates energy demand and reshapes global trade, SB's role in transporting critical commodities becomes increasingly indispensable. The company's commitment to sustainability, financial discipline, and fleet modernization positions it to outperform in a sector poised for long-term growth.

For investors seeking exposure to the energy-driven AI infrastructure boom, Safe Bulkers is a compelling, underfollowed opportunity. While the path won't be without bumps, the company's fundamentals and forward-looking strategy make it a hidden buy in a market that often overlooks the infrastructure underpinning technological progress.

In the race to power the AI era, every watt of electricity and every ton of cargo matters. Safe Bulkers is quietly building a bridge between these two worlds—and investors who recognize its potential today may find themselves in for a rewarding journey.