How the AI Boom Helped This Stock Surge 230% in 2024

A Texas land company founded over 100 years ago has recently picked up heaps of steam, in part thanks to the growing AI boom taking over the stock market. Texas Pacific Land Corp. (TPL), based out of Dallas, has seen its stock triple in value year-to-date. The company only employs about 100 people, but now has a market value of over $40 billion. That’s more than four times the size of American Airlines Group Inc., which is based in nearby Fort Worth and has over 100,000 workers. It even puts a shadow over Halliburton Co., the largest oilfield servicer in North America.

TPL benefits from its 873,000 acres in West Texas, allowing various industries to use their land. Businesses are already building bitcoin mines, utility-scale batteries, and renewable power on TP’Ls space. It also presents an opportunity for big tech and AI players like Amazon Inc (AMZN), Alphabet (GOOGL), and Microsoft (MSFT) to access cheap electricity for energy-hungry servers on the land. Texas Pacific Land Corp has boomed as a result, with the stock up by a significant 101% over the last three months thanks to the rise of AI.

TPL’s shares also surged 14% last Friday on the news that the company would replace Marathon Oil Corp. in the S&P 500. At press time, the stock has settled back down, falling 7% Monday. However, representatives from “There’s a lot of conversations taking place within the industry and definitely within TPL about leasing land to data centers,” TPL Chief Executive Officer Tyler Glover said this month in a conference call with investors. “We feel that we’re positioned as well as anyone in West Texas to provide land and water solutions as those opportunities unfold.”

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Big Tech Looks to Continue AI Developments, Benefitting TPL Stock

Furthermore, big tech is putting more money into physical infrastructure amid the AI boom. Alphabet, Microsoft, Amazon, and Meta Platforms expect to spend more than $200 billion next year, according to data compiled by Bloomberg, much of it on data centers. Thus, TPL’s massive land creates opportunities not just for these AI giants, but for TPL to make more money off its land. If one of these players makes a move on TPL, the latter’s stock could see a further boom.

“A lot of different sectors will be on the receiving end of that,” said Greg Halter, who helps manage $4 billion as director of research at Carnegie Investment Counsel. “You have these oddball entities being revived because all of a sudden they have something valuable.” TPL looks to be near the top of this “oddball” list, reaching $1,600 at press time. Also, the stock’s volume is up to 248,201.

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Even finance masterminds have put their two cents in on TPL, with one legend in the space investing in the company early. As a teenager, Warren Buffett made Texas Pacific Land Trust his second-ever stock purchase, drawn to its steady stock buybacks, which was a rare and attractive strategy at the time. Reflecting on his investment at a 2022 Berkshire Hathaway meeting, Buffett praised the company’s disciplined approach, noting how they bought stock week after week.