This Industrial Metal Is Critical for AI. Should You Invest $1,000?

I have long monitored the price of copper because I consider it a pretty accurate barometer of the health of the global economy. The red metal is a leading economic indicator because it's essential to building factories, homes, cars, semiconductors, and electrical equipment -- among many other products and infrastructure -- and it must be purchased long before these things are built.

But today, the price of copper is soaring for another reason: artificial intelligence (AI) data centers. Global data center electricity consumption is expected to rise from 2% of global demand today to 9% by 2050, and demand for copper in those facilities is expected to increase sixfold.

Thinking about investing in copper?

There are many ways to invest in copper, from copper futures to exchange-traded funds (ETFs). I think a great way is through a fund like the Global X Copper Miners ETF (NYSEMKT: COPX), which provides investors with access to a broad range of copper mining companies.

The fund currently has net assets of about $3.37 billion and holds 41 stocks. Its five largest positions are:

1. Lundin Mining: A Canadian metals miner with operations in Argentina, Brazil, Chile, and the U.S., accounting for 5.55% of the fund.
2. Southern Copper: A U.S. company with mines in Peru and Mexico, at 4.94%.
3. Boliden AB: A Swedish miner with operations in Sweden, Finland, Norway, Portugal, and Ireland, at 4.89%.
4. Glencore PLC: An Anglo-Swiss commodity trading and mining company with projects in Australia, the Democratic Republic of Congo, Peru, and Chile, at 4.88%.
5. KGHM Polska Miedz: A Polish multinational miner with operations in Poland, Canada, the U.S., and Chile, at 4.84%.

Other than Lundin Mining, no stock accounts for more than 5% of the ETF, making it highly diversified within the copper production industry. And it's globally diversified, which insulates it somewhat from political risk -- civil strife or war, appropriation, tariffs, and so forth -- in any one country. That also makes it highly correlated with global copper prices.

The ETF's expense ratio is 0.65%, which is below the category average of 0.95%.

Source: Getty Images.

Critical minerals can result in strong investments

Copper futures prices on the Comex exchange are up about 28% so far in 2025 to around $5.10 a pound. Copper is now deemed so valuable to national security and economic growth that this month, the Trump administration added it, along with silver and uranium, to the list of critical minerals like rare earths.

In addition, industry analysts see a growing deficit of copper in the coming years as demand for the metal outpaces supply. As a result, the Global X Copper Miners ETF is up 66% in 2025, as investors anticipate higher demand and prices for copper in the coming months and years.

If you believe the AI investment craze will continue, now may be a very good time to invest $1,000 in copper.

Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.