The Next Big AI Bubble Is Brewing in Energy

Wall Street never changes. It just finds new ways to forget the past.

Every few years, a new theme captures the imagination of investors. 

In the late 1990s, it was dot-coms. In the 2020s, it was electric vehicles. Today, it is anything that has the letters “AI” attached to it.

The latest frenzy is not in chipmakers or data firms. It’s in energy stocks. Specifically, start-ups promising to build the next generation of nuclear reactors, hydrogen systems, and clean-power networks to fuel the AI revolution.

The story sounds good. Data centers are energy-hungry, and AI computing requires enormous amounts of power. Someone will need to build that capacity. 

However, as the Wall Street Journal reported this week, billions are being poured into energy companies that have no revenue, no customers, and in some cases, not even a license to operate.

Oklo, a nuclear start-up backed by OpenAI’s Sam Altman, is a great example. The company has not generated a dollar in sales, yet its market value has exploded to more than $25 billion. 

Another company, Fermi, was recently valued at around $19 billion. It, too, has no revenue and no signed contracts. 

Others like Nano Nuclear Energy and Terra Innovatum are fetching billion-dollar valuations on little more than hope.

Investors are repeating the same mistake we have seen time and again. They are betting on concept, not cash flow.

When I started on Wall Street more than forty years ago, one of my mentors used to say, “When a company’s story gets bigger than its numbers, get out.” 

He had seen it during the Nifty Fifty bubble of the 1970s and the dot-com mania of the 1990s. The pattern never changes. 

People convince themselves that this time is different.

But it never is.

The dot-com boom gave us Pets.com and Webvan, companies with dazzling stories that went to zero when the hype ran out. 

The EV craze produced Nikola and Lordstown Motors, both once worth billions and now shells of their former selves. 

Today’s AI-energy bubble is following the same script.

Here is the problem. Many of these companies will not see revenue for years. They rely on regulatory approvals, new technologies, and customers who have not yet signed contracts. 

If the AI boom slows, they will have nothing to fall back on. Their valuations will evaporate like mist on a summer morning.

This is where American Prosperity’s approach stands apart. We do not chase fads. We do not invest in hope. We invest in proven businesses that already generate cash flow, led by smart, disciplined managers who allocate capital like owners.

Our focus is on what I call the “real economy” — companies that make things, move things, and power the world today, not ten years from now. These are firms with products that customers need regardless of the next tech craze.

While Wall Street piles into nuclear start-ups with no customers, we look for companies quietly building long-term value: firms with expanding margins, consistent earnings, and strong balance sheets.

The contrast could not be more evident. 

Oklo’s market cap is larger than that of many profitable utilities producing real energy today. Yet it has no license to operate and no revenue until at least 2028. That is not investing, that is gambling.

When speculation replaces fundamentals, markets always correct. It might not happen tomorrow, but gravity always wins. 

And when that happens, investors who built their portfolios on hype will find out the hard way what it means to own air.

At American Prosperity, we stay grounded in reality. 

Our Alpha-4 Approach screens every stock through four key lenses: companies in industries with powerful tailwinds, led by exceptional leadership, that have rock-solid financials. We buy them when they trade at a great price. 

It is how we avoid getting swept up in market manias and how we position ourselves to benefit when the froth clears.

Think back to the early 2000s. After the dot-com bust, the market’s biggest gains did not come from the companies that promised to change the world. They came from the boring businesses that continued to generate profits, while others burned through cash.

That is the opportunity we see again today. 

As investors chase zero-revenue energy start-ups, we are buying profitable, growing companies that are actually selling to the AI economy — not just talking about it. 

From chip suppliers to power-equipment makers, these firms are the ones building the backbone of the new digital infrastructure.

Hype will fade. Cash flow endures.

The market is frothy, yes. However, America is still home to entrepreneurs who create real value. The key is knowing the difference between a dream and a business.

Our job is not to predict the next bubble. It is to stay patient, disciplined, and focused on owning great businesses that compound wealth over time.

Because while speculators chase the next “AI miracle,” real prosperity belongs to those who invest in what lasts.

If you want to join us in investing in the real AI economy, you need to subscribe to the American Prosperity Report. Click here now — and start risk-free with our 30-day money-back guarantee.

If you have questions, you can send them to me at [email protected].

And follow me on X here for daily updates.

Regards,

Charles Mizrahi
Prosperity Insider