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This marks the third and final installment of my series on stocks to play the AI boom. If you missed either of the first two, you can find part 1 here, and part 2 here.

Everyone knows the giant companies supporting AI. Nvidia (NVDA), Microsoft (MSFT), and Alphabet (GOOG) are just a few of the household names. At this point, those Mag 7 stocks are crowded trades. To make money from AI, investors have to look in places where most others haven’t.

In earlier parts of this series, I discussed companies that own land and water rights, which will be important to data center build-outs. But it all starts with energy. Without cheap, reliable energy, data centers don’t run, and AI (as well as many other technologies) lies dormant. We’re going to need a lot of energy.

OpenAI said that in the next eight years, it wants to build 250 gigawatts of new computing power. No big deal – just 20% of all of America’s current electricity-generating capacity.

The electricity generator to take note of is Black Hills (BKH). Based in Rapid City, South Dakota, it serves 1.35 million customers in 8 states, including Wyoming, which is becoming a hotbed for data center construction.

It is also in the process of acquiring NorthWestern Energy (NWE), which will add an additional 800,000 customers. Black Hills counts tech giants Microsoft and Meta Platforms (META) among its data center clients. It will also supply electricity for a new 115-acre data center campus in Cheyenne.

The regulatory framework under which Black Hills operates allows it to provide low-cost electricity to data center operators – an important fact considering that the president wants data centers to pay higher prices for electricity.

Black Hills also pays a solid 3.9% dividend yield and has raised its dividend every year since 1971. That’s an impressive track record. The company just raised its dividend last week to $0.703 per share. Shareholders of record as of Feb. 17 will receive their dividends on March 1.

Black Hills is a great way to generate income while owning a company that feeds the data centers what they’re hungry for: energy.

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