Copper and gold dual-wheel drive + AI infrastructure wave! Goldman Sachs Group, Inc. issued a bullish research report on copper mining giant McMoran Copper & Gold Inc. (FCX.US).

One of the world's largest listed copper producers, Freeport-McMoRan Inc. (FCX.US), saw its stock price close up only 0.29% as of Thursday's US market close, significantly falling from over 2% intraday gains. The core reason behind this undoubtedly is the latest speech by US President Trump weakening the market's hopes for a ceasefire in the Middle East in the short term, with copper and other industrial metal trading prices also being suppressed due to stagflation expectations under the backdrop of a significant rise in international oil prices. However, investment institutions including Goldman Sachs Group, Inc. generally believe that after the Middle East ceasefire, industrial metals such as copper will continue their strong upward trend since the second half of 2025, mainly due to expectations of robust global economic growth and the trend of AI data centers and electrification pushing copper as a "hard demand" metal. It is known that the Wall Street financial giant Goldman Sachs Group, Inc. recently issued a in-depth research report covering Freeport-McMoRan Inc., giving a "buy" stock rating and a target price of $70. As of Thursday's US market close, Freeport-McMoRan Inc.'s stock price closed at $61.38, up over 20% year-to-date, with a full-year increase of 40% in 2025. In the view of Goldman Sachs Group, Inc., the ceasefire announced by both sides is more like a short-term emotional and valuation repair catalyst, and what truly supports the long-term bullish logic of Freeport-McMoRan Inc.'s stock price is still the structural tight balance of copper and the reevaluation of long-term demand brought by AI/electrification. Goldman Sachs Group, Inc. believes that the Financial Institutions, Inc. has provided the best exposure in the structural shortage of the copper market and supplemented by this mining giant's gold mineral exposure, bringing more powerful growth potential than ordinary gold and industrial metal stocks, with both the macroeconomic situation and GEO Group Inc's political tailwinds expected to continue supporting long-term rise in commodity prices, leading to enhanced profitability. Furthermore, senior analysts Nick Cash and Cecilia Tang from Goldman Sachs Group, Inc. stated that the output of Freeport-McMoRan Inc. is at a turning point, which will further enhance the company's profitability in a higher price environment; although this view has been widely accepted by the market due to the restart of the Grasberg mine and the rise in copper prices, analysts firmly believe that the "underestimated profit margin at the asset level" of Freeport-McMoRan Inc. will drive further expansion in the company's overall profit margin. Therefore, analysts expect the operational performance of this mining giant to significantly improve, leading to a higher level of free cash flow generation, thereby enhancing the flexibility of Freeport-McMoRan Inc.'s balance sheet; given the company's historical capital allocation specifics, this should bring a strong boost to shareholder return on investment, while also allocating a significant amount of capital to long-term growth plans amid volatile market conditions. The management of Freeport-McMoRan Inc. has also mentioned in previous earnings calls that copper prices have fallen nearly 10% since the escalation of Iran conflict at the end of February, but the demand from data centers and electrification is more of a "long-term, secular" nature, and will not easily be disrupted. Copper - likely to be the most core asset driving future profit expansion for mining giants The reason why this crucial industrial metal has seen increasing demand since 2025 is primarily due to the craze for new construction and expansion of AI data centers not just limited to purchasing GPUs alone, but the tech giants are making every effort to build a complete set of high-power, high-reliability ultra-large-scale artificial intelligence infrastructure. The higher the power density of the computing cluster, the more it requires more transformers, switching equipment, busbars, cables, and cooling-related power distribution systems; with copper's high conductivity, thermal conductivity, and processing adaptability, it almost permeates every layer from "grid connection - data center campus power distribution - server room power supply - server internal connection" in such large-scale AI data centers. The current global financial markets are extremely confident that "copper is not only a short-term commodity, but also a fundamental production element for the AI data center, power transmission, storage, electric vehicle chain, and a strategic resource necessary for economic independence amidst political turbulence from GEO Group Inc". A forecast report from S&P Global, Inc. predicts that by 2040, new demands such as AI data centers, national defense, and Siasun Robot & Automation will drive global copper demand 50% higher than current levels; the latest research report from S&P Global, Inc. shows that the global copper supply gap is expected to expand to 10 million metric tons by 2040, with demand rising to 42 million metric tons, an increase of 50% over current levels. More urgently, a forecast from ING Groep NV Sponsored ADR group predicts a refined copper shortage of 600,000 tons by 2026, continuing the trend of a 200,000-ton supply gap in 2025. More importantly, the core demand for copper DRIVE has shifted from traditional real estate and manufacturing cycles to a double structural pull of "AI electrification + energy transition". The IEA clearly designates copper as one of the "cornerstones" of all electricity-related technologies, pointing out that in an energy transition scenario, the demand for copper in power lines will at least double by 2040 from 2020; its data further indicates that annual copper demand in the power grid sector will rise from 5 million tons in 2020 to 7.5 million tons by 2040, approaching closer to 10 million tons if the energy transition accelerates. In other words, copper is not only urgently needed for photovoltaics, wind power, and electric vehicles, but also as a "conductive metal" necessary to transmit this electricity, stabilize it, connect to AI data centers and terminal loads. This also means that the unprecedented momentum of AI does not replace the logic of energy transition, but instead elevates the already tight demand for electrification-related copper. This is why recent large mining companies such as BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs and Harmony Gold have been actively increasing their exposure to the copper business, highlighting copper's upgrade from an attractive growth metal to the most critical asset determining the future profit growth of mining enterprises.