Copper’s AI Boom – Three Ways to Play It

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Editor’s Note: Some of the fastest growing sectors in the market right now, like AI data centers, electric vehicles and new power grids, all need one critical input: copper. Only, bringing new mines online takes years. That’s a compelling setup for investors watching the next phase of the AI buildout.

Now, a potential tariff on a specific form of copper could add another catalyst for certain U.S. producers.

Today, my friend and colleague Jonathan Rose shares two stocks and a fund to watch. Then he dives into the details on a specific trade in his favorite copper stock.

Yes, Jonathan brings decades of professional trading experience at some of the busiest floors in America. But he also goes further and shows you his thinking, answers questions, and helps you understand the risks before putting money to work.

Get your free Masters in Trading LIVE emails by signing up here.

And watch your inbox for his upcoming $10K to $100K Challenge, where he’ll show you his strategy in more detail.

Now, let me turn things over to Jonathan…

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A bunch of kids from the Goon Docks are about to lose their neighborhood.

Developers want the land, and their families are facing foreclosure. Then, up in an attic, the kids find an old map that might lead to a pirate’s fortune.

You know where we’re going.

Those kids soon run into underground tunnels, booby traps, One-Eyed Willy… and an entire pirate ship full of treasure.

The Goonies.

And after everything those kids go through, what actually saves their homes is a handful of gems tucked away in Mikey’s (Sean Astin) marble bag. That’s the treasure they manage to bring home.

I’m a huge Goonies fan. Whenever I talk about copper, I sneak an image of Chester Copperpot into the presentation (an old newspaper article about Chester inspires the Goonies’ treasure hunt). I can’t help it.

There’s a useful trading lesson in that treasure hunt.

Finding the treasure was a big deal, but standing on a ship full of gold didn’t pay off the families’ mortgages. The gems that made it home did.

I think about trades the same way. Finding an opportunity gets me started. Then I need to work out how to get in, how much I could lose, and when to get out. A great investment story only takes you so far. You need a plan to turn it into a profit.

Right now, copper has my attention.

It’s an essential ingredient in the AI buildout. And Washington is considering a policy change that could make certain copper businesses even more interesting to investors and traders.

I’ll walk you through two stocks and a fund to watch. Then I’ll show you how I approached a specific trade in my favorite name, live on my free show.

Because the way you get into copper matters.

The Edge in Copper

AI needs copper. All that compute, all that power delivery, all that cabling: It runs on copper.

How much are we talking about? Estimates cited by U.S. Global Investors put copper requirements for a large AI-focused data center as high as 50,000 tons. The amount depends on the facility’s size and design, but that gives you an idea of the scale.

For comparison, an average 2,100-square-foot single-family house contains about 439 pounds of copper. At that upper-end data-center estimate, we’re talking about more copper than you’d find in 200,000 of those homes. That’s just my back-of-the-envelope math, but you get the picture.

Now add power grids, electric vehicles, and the rest of the electrification story. S&P Global projects annual copper demand could reach 42 million metric tons by 2040, up roughly 50% from current levels. Without a meaningful expansion in supply, it projects a shortfall of about 10 million metric tons that year.

And you can’t just decide you need more copper and have a new mine producing it next week.

That’s a compelling long-term investment story.

But for traders like me, the answer isn’t just “buy copper.” That’s not enough.

We need to look at where the edge is. It’s easy for everybody to look at copper and say, “There’s going to be more demand. Let’s get long copper.”

I want a catalyst. Something specific that could change what buyers are willing to pay.

In this case, I’m watching a tariff… a tax.

Washington’s copper policy opened the door to a possible phased tax on imported refined copper. We’re looking at 15% beginning in 2027, stepping up to 30% in 2028. Those were the recommended rates, with a market review required to inform the president’s decision on whether to impose them. The potential tax is the catalyst I’m watching.

So we need to start researching. What exactly is refined copper? Who produces it? Which companies might benefit if imported material becomes more expensive?

Look, I don’t have the most information. Nobody has the whole picture. That’s why we follow the money.

Big players position before news becomes official, and that positioning can leave footprints we can see. I learned that on the trading floor, first at the CME and later at the CBOT and CBOE. Traders are constantly watching the biggest players in the room.

It’s like a betting line for an NFL game. The line moves as money comes in. You want to understand what’s moving that line.

The same thing happens in the stock market. The market doesn’t wait for certainty. It starts repricing the probability.

But not every copper stock plays this particular story the same way.

Freeport-McMoRan Inc. (FCX) is my favorite. Freeport’s U.S. operations include the huge Morenci mine in Arizona, along with the Miami mine and smelter in Arizona and a refinery in El Paso, Texas. So we’re looking at a company that both mines copper and processes it into usable metal. Freeport’s U.S. processing operations are part of what interests me in this potential tariff setup.

Rio Tinto plc (RIO) is another name I’m watching. This British-Australian giant has U.S. ties through its Kennecott copper operation in Utah, which includes the Bingham Canyon mine, a smelter, and a refinery. It’s a much bigger, more diversified company, so it gives you a more indirect way into the idea.

If you’d rather own a basket, there’s Global X Copper Miners ETF (COPX). That gives you exposure to copper-mining companies around the world. The trade-off is that you’re spreading your investment across businesses with different operations and different exposure to Washington’s tariffs.

Know what you own and why you own it.

Even with a treasure map, you still have to choose your route. Those three names take you into copper in different ways.

For the trade I shared on my Masters in Trading LIVE show, I wanted FCX.

Come See How I Work Through a Trade

During my September 3 LIVE broadcast, FCX had pulled back.

I looked at it using my Volatility Visualizer. That’s a tool that helps me see the stock’s expected trading range. I would have liked an entry closer to the bottom of that range, but I still liked the opportunity.

So I walked my viewers through a specific trade for our free portfolio. At the prices I discussed, one position put about $450 at risk, with a maximum potential profit of about $2,050, before fees. That’s better than 4-to-1.

Those were the terms of the trade I showed that day. The potential payoff wasn’t a prediction or a realized gain, and prices have moved since then.

But it gives you an idea of the work we do at Masters in Trading LIVE and my premium services.

We had a specific catalyst and a clear amount at risk. And so, we could work through the potential reward before putting money into the position.

You remember the booby traps in The Goonies. The treasure was real, but so were the risks along the way. Before I enter a trade, I want to know what happens if it goes wrong.

Then you have to decide: Does this trade make sense for you? Do you like the idea? Are you comfortable with the amount at risk?

That’s what we do on the show every day. I walk through trades and the thinking behind them.

And if it’s unfamiliar, paper-trade it. That just means write the trade down. Follow the stock. Watch how the trade behaves. Learn and build your confidence before risking money.

Copper is just one example of the ideas I share. In recent weeks, I’ve also covered cybersecurity names, Space Race 2.0 stocks, and how the November 3 midterm elections could impact the “government put.”

What I’m watching changes with what the market is telling me. A company can be a good long-term investment while offering an unattractive entry today. Another day, a pullback or a change in the trading activity can put it back on my radar.

That’s why I keep showing up and doing the work.

Every market day, I go live on YouTube at 11 a.m. Eastern to show you the sectors, specific names, and broader market stories catching my attention.

I explain what I’m seeing. I walk through trade ideas. And I take questions from viewers while I’m live, because I believe the best way to teach is to engage with you directly.

Sign up for free Masters in Trading LIVE emails here. Once you’re onboard, we’ll send you a daily email with the link to watch, along with more pieces like this one and research from me.

Copper gives us a compelling investment story. I want to help you work through the next questions: Which opportunity? What entry? How much risk? What’s the plan?

Think back to Mikey’s marble bag. The Goonies found an enormous fortune, but the gems they carried out were what saved their homes. Finding something valuable and coming away with something valuable were two different parts of the adventure.

Copper is on the map. Now let’s work on a plan to bring something home.

Remember, the creative trader wins.

Jonathan Rose

Founder, Masters in Trading

P.S. Jonathan’s copper example shows why I encourage you to follow his work. He explains what catches his attention, how he approaches a trade, and what he’s willing to risk. Sign up for his free Masters in Trading LIVE emails here to receive the daily broadcast link and additional research. You can follow along, ask questions, and get to know his teaching. And watch your inbox for details about his upcoming $10K to $100K Challenge.

Sincerely,

Louis Navellier

Editor, Market 360