Investors are keenly watching the evolving landscape of artificial intelligence (AI), which holds significant transformative promise. However, the shifting dynamics in the market mean that today’s leaders and laggards might quickly change.

In a recent conversation, Microsoft (NASDAQ: MSFT) CEO Satya Nadella expressed a sentiment that could spell challenges for 2023 and 2024’s standout performer, Nvidia (NASDAQ: NVDA). While Nvidia has capitalized on tremendous AI growth, Nadella’s comments hint at new developments that could also favor a certain commodity known for its high dividend-paying stocks, often sought by passive income investors.

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Nadella’s Insights: “Not Chip Constrained” Anymore

In a recent podcast with venture capitalists Brad Gerstner and Bill Gurley, Nadella discussed various aspects of AI. Notably, his remarks regarding Nvidia’s chip availability seemed to dampen market enthusiasm. He acknowledged that while Microsoft had previously faced constraints in acquiring Nvidia chips, those conditions appear to be changing.

Nadella stated:

I am power-constrained, yes; I’m not chip supply constrained … We were definitely constrained in ’24. What we have told the street is that’s why we are optimistic about the first half of ’25 which is the rest of our fiscal year. After that, I think we’ll be in better shape going into 2026, and we have good line of sight.

This remark has been reflected in Nvidia’s recent stock performance. Since 2023, the demand for Nvidia’s chips significantly exceeded supply, leading to sharp revenue increases. Microsoft, as Nvidia’s largest customer, is estimated to have contributed approximately 20% to Nvidia’s sales over the past year.

Microsoft’s earnings calls had earlier indicated supply constraints, suggesting that its Azure growth, especially in AI applications, could have been stronger. Nadella’s recent comments about alleviating these constraints indicate one of three possibilities: Demand for AI may be leveling off, chip supply is improving, or a mix of both is occurring.

Are AI Advancements Slowing Down?

Recent discussions hint that improvements in AI large language models might be becoming harder to achieve, potentially slowing the pace of innovation. Although major industry players have disputed these claims, uncertainty could impact AI chip demand. If businesses start seeing fewer immediate returns on AI investments, demand may begin to fade, particularly among smaller GPU buyers.

However, optimism remains prevalent among many companies in the sector. Another factor to consider is Microsoft’s in-house-designed Maia accelerators, which may ramp up in production by mid-2025. Microsoft had previously lagged behind competitors in developing custom chips that reduce reliance on Nvidia’s expensive GPUs, which explains its substantial purchases from Nvidia.

With the Maia accelerators and Cobalt CPUs introduced just a year ago, Nadella’s observations may reflect an anticipated increase in Maia chip production, relieving Microsoft’s chip issues.

Natural Gas Stocks: The Unsung Heroes of 2025?

Turning to the implications of Microsoft’s “power constrained” status, there are growing expectations for electricity demand in the U.S. to surge, primarily driven by AI data centers. This expected demand may exceed the growth observed in the last decade.

Renewable energy sources will play a part, but their intermittent nature and requirement for infrastructure connectivity add complexity. Furthermore, while nuclear energy has gained attention, the time required to revitalize old facilities, like the shuttered Three Mile Island, reduces its immediate viability.

Financial expert David Tepper has noted that natural gas will be crucial to meeting these rising energy needs. In September, he stressed, “If you’re going to meet the power needs of what they need for AI, you’re going to have to use natural gas.”

This sentiment has recently been echoed by Morgan Stanley energy analyst Stephen Byrd. After accurately predicting the rise of nuclear stocks, Byrd now foresees natural gas stocks benefiting from escalating energy demands to fuel AI operations. He envisions new natural gas facilities built in proximity to AI data centers, streamlining energy supply without the lengthy approval processes associated with traditional grid connections.

If natural gas demand surges, leading stocks in this sector could see significant value appreciation.

The Go-To Natural Gas Investment

If Nvidia is the benchmark for AI stocks, then EQT Corporation (NYSE: EQT) stands out as a top contender in the natural gas sector. EQT has secured extensive land in the Marcellus and Utica shale formations, known for having abundant, low-cost natural gas reserves in the U.S.

With expansive holdings and competitive drilling costs, EQT recently further reduced its break-even costs through its acquisition of midstream company Equitrans, completed in late July.

This acquisition positions EQT uniquely as the only vertically integrated player in the Basin, encompassing production, gathering, processing, storage, and pipeline operations. Such integration will enhance its operational efficiency and market responsiveness.