DeepSeek threw the markets in turmoil last week with the evidence that advanced A.I. doesn’t need as much energy as previously thought. However, America still relies on an aging power grid with a multitude of high demands placed on it, from crypto to A.I. to household uses during extreme weather events. It’s important for us to continue finding additional and alternative energy sources and utilize the ones we have to their greatest efficiency.

The CEO of American Superconductor (AMSC) joined Market on Close this week to discuss how his company fits into that. Founded in 1987, their website tagline is “We don’t generate the energy. We keep it moving.” The company provides “advanced power electronics and superconductor systems” over land, sea, and air to keep power flowing through the grid.

They have a focus on renewable energy, including finding ways to reduce the cost of wind energy. However, CEO Daniel McGahn noted that much of their renewable work is abroad, especially in India, and their U.S.-based operations are focused on “industrial manufacturing capacity”, including in data and utilities. He expects to see a boon from domestic investments as the U.S. concentrates on competing with China.

In its 3Q earnings report on Feb. 5, AMSC beat top and bottom-line estimates, with EPS of $0.16 and revenue of $61.4 million (representing +56% growth, and hitting a record). Its revenue guidance for 4Q also pleased the Street, and it does not expect its losses to exceed $1M in its next report.

While perhaps not a glamorous name, the company shows potential, with Zacks showing it handily beating estimates for the last 7 quarters. It also finally turned a profit per share in January of 2024. CEO Daniel McGahn noted that value per project has gone up and says they’re at a new point in the business after the “upward trajectory” of the last year and a half.

The stock is up over 200% in the last year, with a huge green candle on Feb. 6 following earnings. However, looking long-term, it has fallen massively from highs reached in 2000 (record high of $751.25/share) and the late aughts.

With tariffs looming in the forefront of every trader’s mind, McGahn says AMSC is in a “fantastic spot”, with revenue and supply chain largely based in the U.S., though they do have some international exposure. He argues that AMSC is a “safe” play because of its industry and positioning. The company also has contracts with the U.S. Navy, which he sees as a strength as the world gets “more dangerous, not less.”

If investors are looking outside the Mag 7 for A.I. companies, AMSC could be an intriguing name for energy exposure. The energy grid will continue evolving as demand increases, and companies quietly working and growing in the background here could see strong returns in the long run. However, investors should consider the busy competitive landscape and look for the companies they think will dominate.

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