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AI’s Unlikely Ally: How Energy Powers the Digital Revolution

BY | ETF Database
8:43 am ET 10/26/26 | 28 VIEWS
  • Related Symbols
  • XLE
Many investors are fixated on tech and AI ETFs, and for good reason, given how potent AI hype and its subsequent buildout have turned out to be.Key Takeaways: Tech and energy companies used to be viewed as stocks that move in different directions, but that narrative is shifting. As AI grows more prevalent, power demands continue to mount, and the energy sector stands to benefit. Investors could use the State Street Energy Select Sector SPDR ETF (XLE A) to tap into the opportunities within AI power needs and the energy sector itself. However, there are far more ways to gain exposure to opportunities within technology and AI than simply owning the top tech names. For instance, the energy sector may warrant a closer look for this specific reason. Some may find this rather ironic, since the narrative used to be “tech vs. energy”, with tech traditionally viewed through a growth lens and energy treated as a short-term value or cyclical play. Today, however, the energy sector is emerging as a strong beneficiary of the ongoing growth in tech. This is due to the immense power demands that AI requires. AI computing is power-intensive and requires thorough infrastructure to keep its data centers and large language models (LLMs) running. See More: New Earnings Show the Healthcare Sector Has a Pulse Here’s where things get even more advantageous for energy stocks: energy companies are benefiting from AI and growth, while still harnessing their traditional cyclical merits. This allows energy sector exposure to be the best of both worlds, in which one taps into long-term growth along with cyclical value.Harness the Energy Opportunity With XLEThose seeking to amplify their exposure to the energy sector may want to take a look at what the State Street Energy Select Sector SPDR ETF (XLE A) brings to the table. XLE focuses its allocations on energy giants within the S&P 500, all for the cost of eight basis points. Geopolitical tensions are already driving demand for energy exposure through rising oil and gas prices. Combining this cyclical strength with long-term AI momentum creates a strong potential for noticeable returns. Indeed, XLE’s report card is showing why the energy sector could warrant a closer look. As of September 30, 2026, the fund’s NAV is up a whopping 40.13% year to date. For more news, information, and analysis, visit our Sector Investing Content Hub.

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