New Era Energy & Digital (NASDAQ:NUAI) has been one of the most successful AI stocks that you have probably never heard of. It only has a $350 million market cap, but the AI infrastructure play is up by more than 1,500% over the past six months. The tailwinds this stock enjoys suggest that it can extend its rally, especially with the resources that it already has. These are some of the reasons New Era Energy & Digital looks like a promising pick.
Tech giants need more gigawatts for AI compute
New Era Energy & Digital has the same investment thesis as IREN (NASDAQ:IREN) and Cipher Mining (NASDAQ:CIFR). As tech companies continue to adopt AI, they will need more gigawatts that can handle AI workloads. These companies also need specifically-built AI data centers that offer access to these gigawatts.
IREN and Cipher Mining have both excelled with this model. Both companies have multiple sites already built and are working on additional facilities. These AI infrastructure leaders have also signed lucrative long-term deals with tech companies.
New Era Energy & Digital has more energy than both of those companies. The company has a land option purchase agreement for 3,500 acres in New Mexico, which comes to 7 gigawatts. That site alone contains more energy than IREN and Cipher Mining combined. New Era Energy & Digital intends to allocate 2 gigawatts for natural gas energy and 5 gigawatts for nuclear energy. It’s also co-developing a 1 gigawatt AI data center in Texas. All of these gigawatts can translate into substantial revenue as the AI buildout expands. For instance, IREN and Microsoft (NASDAQ:MSFT | MSFT Price Prediction) agreed to a 5-year, $9.7 billion deal for 200 megawatts. Eight gigawatts come to 8,000 megawatts, showing what is possible for New Era Energy & Digital.
Time and Execution Risk Present An Opportunity
These two factors are the only reasons that New Era Energy & Digital has a $350 million valuation instead of being more valuable than IREN and Cipher Mining. Those two AI data center providers have completed sites with long-term hyperscaler tenants. IREN will bring an additional 1.4 gigawatts online in April.
New Era Energy & Digital’s 1 gigawatt Texas site won’t deliver power until early 2027, but it can end up being more than one gigawatt. That doesn’t even mean the entire gigawatt will be ready by them, as some AI data center providers do energy capacity releases in waves. The company expects initial power delivery for its New Mexico site by 2028.
Based on the valuations of IREN and Cipher Mining, relative to their gigawatts and tailwinds, if NewEra Energy & Digital has 8 gigawatts available in completed AI data centers, it has the potential to 100x from current levels. It’s also easy to assume that the company will acquire more land and power to expand its portfolio.
However, the company has to hit its deadlines. Both projects will also require substantial capital before any meaningful money arrives. That’s part of the reason why New Era Energy & Digital is looking for a hyperscaler tenant, and the company said in January that it remains on track to sign one of these customers by the end of the first quarter.
Investors who can wait out the time and execution risks can end up with significant gains if New Era Energy & Digital capitalizes on the opportunity. With energization starting in 2027 and 2028 for the Texas and New Mexico sites, respectively, it can still be several years before the fruits of this labor are fully realized for shareholders.
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