Anthropic’s S-1 Says Natural Gas, Not Chips, Is AI’s Biggest Bottleneck. Here’s the Stock That Sells the Engines.

Anthropic's S-1 filing revealed that power is still one of the biggest bottlenecks for artificial intelligence (AI) companies. For investors, that makes natural gas stocks particularly attractive, as Anthropic mentioned natural gas five times in just one paragraph in its filing.

There are a few ways to capitalize on that opportunity, ranging from owning shares of natural gas producers to owning shares of companies that own and operate pipelines and supply gas to data center campuses. One I'd lean toward is Energy Transfer (TXSE:ET), which operates over 140,000 miles of pipelines and associated energy infrastructure across 44 states.

Image source: Getty Images.

The bigger story

There's no publicly available information that Energy Transfer is connected to Anthropic. Rather, the bigger takeaway about natural gas from Anthropic's S-1 filing is how a company like Energy Transfer can benefit.

The AI start-up shared this in its S-1:

For example, certain of our planned data center facilities rely on dedicated on-site natural gas-fired generation, which exposes us to fuel price volatility and supply disruptions outside our control, the costs of which we bear on a pass-through basis. These facilities are also subject to constraints on pipeline capacity and firm fuel transportation necessary to deliver natural gas.

Anthropic even notes that being unable to secure gas supply and transportation during facility development could cause "a planned site to be delayed or abandoned." That's a huge risk: not only to have a site delay when trying to create advanced AI models, but to potentially have to abandon a site completely. And that risk shows why access to natural gas is so important.

How Energy Transfer wins with AI

Anthropic and its rival, OpenAI, which may go public in 2027, will win by having the best AI models. But Energy Transfer only needs AI use cases and adoption to increase to win, as it will create more power demand from AI companies. While the AI story is still in its early stages, it looks as if that's happening. According to research from The Motley Fool, 26.8% of U.S. businesses used AI in October 2026, compared with 3.7% in September 2023.

Energy Transfer is already capitalizing on that demand by signing an agreement with Oracle to supply natural gas to three of its data centers in the United States. It also has an agreement to provide a Nexus Data Center hyperscale campus with natural gas, as well as a 20-year binding agreement with Entergy Louisiana, a subsidiary of Entergy, to provide natural gas to its facilities in Louisiana. In a roundabout way, that connects Energy Transfer to Meta Platforms, as Meta is partnering with Entergy Louisiana to power a data center facility.

What to watch out for

One of the biggest risks associated with Energy Transfer's AI opportunities is that building out pipelines and infrastructure could yield lower-than-expected returns.

Long-term debt is at $68.8 billion, a byproduct of building and expanding its extensive energy pipeline network. The debt is manageable as long as profits continue to grow, as we saw in the third quarter of 2026. For the third quarter, Energy Transfer's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 31% from the prior-year period to $5 billion, which suggests the company's investments are paying off. But if debt keeps climbing while EBITDA falls, it's reasonable to question if the spending is justified.

With that understanding, there's still a lot to like about the company, including its 7% dividend yield and a dividend payout that has increased for 20 consecutive quarters. And as for where the stock price could head next, analysts are generally bullish. According to CNN-tracked data, of the 26 analysts who cover the stock, the median one-year price target is $25, representing a 28.6% gain from the Nov. 10 closing price of $19.43.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Entergy, Meta Platforms, and Oracle. The Motley Fool has a disclosure policy.