The artificial intelligence revolution is no longer just a story about Nvidia, Microsoft and the tech giants splashing hundreds of billions on data centres. It has quietly become one of the most powerful forces reshaping commodity markets — and for investors who missed the tech rally, the picks-and-shovels trade in raw materials and energy may now offer the more compelling opportunity.
That is the argument made by Thomas McMahon, head of investment companies research at Kepler Partners, in the latest of This is Money’s Investing Analyst series. McMahon’s thesis is straightforward: building AI infrastructure requires enormous quantities of copper, uranium, steel and power, and the companies supplying those inputs are increasingly pricing in what that insatiable demand means for them.
Amazon has plans to spend $200 billion of capital expenditure in 2026, mostly on data centres. Alphabet is targeting $185 billion. Microsoft has been spending upwards of $35 billion per quarter. Data centres need power — vast, uninterrupted quantities of it — which explains why uranium, nuclear power stocks and uranium miners have surged as tech companies have made their own investments into nuclear energy or struck deals to buy power from reactors.
Yet the AI boom is also driving demand for more familiar commodities. Huge amounts of copper are needed to connect renewables to the grid and build electric vehicles. Steel and iron ore are required for wind turbines and solar panels. As McMahon puts it, the commodity producers supplying the AI infrastructure have taken over from tech companies as the smarter way to play the trend.
What happened to gold — and where does it go now?
Gold is a more complicated story. The metal surged dramatically through 2025, driven by a combination of central bank buying — most significantly from China, which has been diversifying away from US dollar-denominated assets since the West froze Russian reserves following the invasion of Ukraine — and speculative buying by Western retail investors via exchange-traded funds.
That speculative wave peaked in January before a sharp ten per cent correction in a single day. At the time of writing, gold sits at around $4,300, well below its peak of approximately $5,500, and has failed to rally despite the outbreak of war in the Gulf — a striking failure for an asset widely held as a geopolitical hedge.
McMahon believes the extraordinary rally of 2025 is unlikely to resume. Higher government bond yields and reduced expectations of interest rate cuts have diminished the relative attraction of gold as a defensive holding for Western investors. Central bank demand from China remains structurally intact, he argues, but that driver alone is insufficient to replicate last year’s returns.
His preferred play is gold mining equities rather than the metal itself. Miners have been recovering from depressed valuations and, as long as the gold price holds its current range, should generate substantial cash.
The best investment trusts for the AI commodities trade
For investors looking to benefit from these trends, McMahon identifies several investment trusts as particularly well positioned.
BlackRock Energy and Resources Income (BERI) invests across mining, traditional energy and energy transition stocks, with managers able to shift tactically between them. It has delivered around 130 per cent share price total return over five years while tech stocks grabbed the headlines, and is up 21 per cent in 2026 alone against 11 per cent for global equity markets.
BlackRock World Mining (BRWM) offers significant gold miner and copper exposure and has delivered 90 per cent total return over the past year. For generalist commodity exposure, CQS Natural Resources Growth & Income is another option, though McMahon notes the board is reviewing management arrangements, creating some near-term uncertainty.
For investors seeking a more adventurous angle, McMahon flags BlackRock Latin American Investment Trust as a wildcard. Latin America — home to vast copper reserves in Peru and Brazil — is among the regions most directly exposed to the commodity demand surge driven by AI spend, and the trust’s shares are up 4.3 per cent in 2026.
McMahon’s conclusion is direct: forget gold as a momentum trade, avoid expecting semiconductor stocks to repeat their recent run, and focus instead on the energy and infrastructure commodities that make AI physically possible. The picks and shovels, as ever, may prove more durable than the gold rush itself.
This article is for information purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
