Remember when your biggest worry about AI was whether it would steal your job? Well, plot twist: Uncle Sam is throwing around $3 trillion like it’s Monopoly money to make sure America wins the AI arms race. And if you can’t beat ’em, you might as well profit from ’em.
Here’s the deal: The government is basically playing SimCity with real money, and two companies are sitting pretty in the path of this cash tsunami.
Lithium Americas (LAC): The Battery Whisperer
First up is Lithium Americas Corp., and no, this isn’t your typical “lithium is the new oil” pitch. This company actually split itself in two back in 2023 – keeping the cheap Argentine stuff in one bucket and the shiny new American project in another. Smart move, because apparently the U.S. government really, really wants domestic lithium.
How much do they want it? They just dropped $100 million on LAC in September, taking a 5% stake like they’re some kind of venture capitalist with unlimited funds (which, let’s be honest, they kind of are). Energy Secretary Chris Wright wasn’t subtle about it either: “American lithium production is going to skyrocket.”
The company’s Thacker Pass project in Nevada has been stuck in regulatory hell since 2018, but suddenly all those environmental lawsuits are getting settled. Funny how a government check can clear the air, literally and figuratively. They’re targeting 2027 for completion, and at a $1.3 billion market cap, this thing is priced like a startup, not a company sitting on massive lithium reserves.
Fair warning: LAC’s stock moves like a caffeinated day trader. Lithium prices are all over the map thanks to Chinese speculators, so expect some wild rides. But if you’re thinking long-term, remember that AI data centers need batteries like fish need water.
Alcoa (AA): The Aluminum Alchemist
Now for Alcoa, America’s aluminum heavyweight that’s been through more drama than a reality TV show. Trump slapped tariffs on Canadian aluminum (where Alcoa has factories), sending shares tumbling. Then he lowered them. Then raised them again. It’s been like watching someone play economic ping-pong.
But here’s where it gets interesting: The administration is starting to worry about inflation, so they’re quietly opening the door to tariff relief for companies that expand U.S. production. Alcoa is already doing exactly that, investing $60 million in American smelters while their competitors are getting hit with surcharges.
Meanwhile, American aluminum stockpiles are running so low that the London Metal Exchange sold its last 125 tons in October. When you’re the biggest domestic producer and supply is tight, that’s what we call a good problem to have.
AI data centers are aluminum-hungry beasts – they need it for power distribution, cooling systems, and server racks. At 11 times forward earnings, Alcoa isn’t exactly cheap anymore, but when the government is essentially guaranteeing demand while choking off foreign supply, sometimes “fair value” is just the starting point.
The bottom line? When the government decides to throw trillions at a problem, the smart money follows the money. These two stocks are positioned right in the path of Washington’s AI spending spree. Just remember: investing with the government is like surfing – timing matters, and sometimes you wipe out spectacularly.