Practically every single stock today falls into some category within the artificial intelligence framework. But that’s not as restrictive as you may think.
The recommendations inside this report – ones my stock-picking system called Apogee flagged – represent a more nuanced approach to the AI Revolution.
In fact, that’ll be the case with the vast majority of my system’s stock picks. They’ll fall into one of four AI categories I’ve identified…
- AI Builders – Stocks that let you invest in AI directly, like companies that are creating the software and hardware architectures that enable AI technologies and operate at scale.
- AI Enablers – Stocks that let you invest alongside AI. They supply the physical materials, energy, real estate, and infrastructure required to build and operate AI systems.
- AI Appliers – “Stealth” AI stocks that may appear old school or “boring,” but successfully integrate AI into existing business models.
- AI Survivors – Companies whose business models are resilient to AI disruption.
In this special report, we’ll be focused on that last one – the Survivors.
The AI Survivors are what I call “future-proof” companies. These are the enterprises that produce physical products or services that AI cannot replace.
Agriculture companies would be one example. No matter how sophisticated AI becomes, humans will want to eat avocados and bananas.
Similarly, companies that produce natural resource products like copper, aluminum, or timber should be able to survive the growth of AI technologies… at least for a long time.
These are the kinds of companies and industries AI cannot replace, at least not directly. At some point in the future, of course, advances in AI could decrease, or even eliminate, the need for fossil fuels or industrial metals.
But over the near term, AI is more likely to boost demand for energy and raw materials than to reduce it.
Of my four categories, the AI Survivors are the easiest to overlook, mostly because they tend to operate in “old school” industries that seem unglamorous on the surface. However, these industries could become increasingly glamorous, as AI fans out across the global economy and starts claiming victims in hundreds of industries that are not future proof.
Additionally, many AI Survivors will also become AI Appliers and thereby boost their profit margins. An agricultural company, for example, can use AI enabled drones and/or sensors to optimize inputs like fertilizer, irrigation, and pesticides.
In other words, future-proof companies not only possess the potential to survive the onslaught of AI, but to thrive from it.
In the past, we did not routinely consider the future-proof qualities of any prospective investment. We did not worry about some ominous, potentially destructive force like artificial intelligence rewriting the rules of almost every business on the planet.
We simply looked at company-specific metrics like the growth of market share, earnings, and dividends. But that sort of analysis may no longer be sufficient to prepare for the world that lies ahead.
The risks that AI imposes require us to make informed guesses about the future viability of specific companies – and even entire industries. In fact, AI requires us to not only future-proof our portfolios, but future-proof our individual career paths, to whatever extent we can.
For example, which jobs are more future proof…
- Accounting or bartending?
- Software coding or yoga instructing?
- Graphic designing or river raft guiding?
I am not certain I know the answer, but if I had to place a bet, I’d place it on the bartenders, yoga instructors and river guides. This is an aspect of AI that I call the “Revenge of the Bartender” – an honest job that I performed in my youth, and one that will probably last for as long as alcohol is legal.
By contrast, the high-paying “thinking” jobs – the kind that typically require college degrees – are going away… or at least not keeping pace with overall employment trends.
Although a bartender might never become rich, at least not Silicon Valley-style rich, a bartender will not lose employment to AI. On the other hand, “thinking” jobs can produce wealth, but they could also become increasingly susceptible to the death grip of AI.
Therefore, the need to future-proof your life starts now… including your investment portfolio.
Clearly, there is nothing we can do to stop AI’s disruption. But there are companies we can get behind that’ll bend with the wind instead of breaking against it – those that will deliver what people will always need, AI or no AI.
Here are three that caught my attention recently…
10X AI Survivor No. 1
The Owner of the “Drink of the Summer”
A century-old aperitif is one of the main reasons to invest in Davide Campari-Milano NV (DVCMY), but not the only one.
The Italian beverage giant has amassed an impressive stable of iconic spirits brands like Wild Turkey, Courvoisier, Grand Marnier, and, yes, Campari. But the lead pony is Aperol – the “it” spirit of the Gen Z crowd.
Technically, Aperol is an amaro, a category of herbal liqueurs. But Aperol is not merely an amaro. It is a fashion brand, a lifestyle statement, and a TikTok superstar, all wrapped into one.
A couple of Italian brothers from Padua, Italy, invented the specific Aperol recipe in 1919. For decades thereafter, Aperol enjoyed regional popularity in Italy, but it remained largely unknown outside the country.
The “Aperol Spritz” changed all that.
A few years ago, this kitschy cocktail started to attract a cult following. The drink’s vivid “TikTok-ready” orange hue, low alcohol content, and refreshing flavor resonated with millennials and Gen Z. Before long, the Aperol Spritz became a worldwide sensation, fueled by social media.
The Aperol Spritz is not only visually striking, but its simple formula – Aperol, prosecco, and soda water – makes it easy to adopt, and also to modify in alluring ways. Bartenders and “mixologists” are continuously tweaking the basic spritz mixture to create specialty “house” variations. This ongoing evolution and reinvention provide a constant tailwind to the Aperol craze.
As Food, Drink, Life observes:
Bartenders are now remixing the classic spritz into frozen blends, margarita hybrids and even Aperol negronis. These spins keep the drink feeling fresh and seasonal, while still honoring its bittersweet roots. People want variety, and Aperol delivers without overcomplicating things.
What also makes it enduring is its low-alcohol content. At just 11%, Aperol is perfect for those leaning into moderation, like brunches that stretch into the afternoon, beach days that need something light or dinner parties where you want a second round without the regret. It’s social without being sloppy. In a culture that’s shifting toward balance and intentionality, Aperol fits the mood: festive, flavorful and just the right amount of indulgent.
The drink has evolved into a cultural shorthand for style and joie de vivre, and current growth rates suggest its global potential is far from exhausted. According to a 2024 Coffeeness study, the Aperol Spritz ranks as the most popular cocktail in the United States, leading in 22 states – outpacing the margarita and the old fashioned. Alert to these trends, the company has started producing ready-to-drink (RTD) versions of the Aperol Spritz.
Campari’s full-year financial results reflect Aperol’s growing brand strength, even against a difficult backdrop for the wider spirits sector. In the United States, the company outpaced its competitors by a wide margin, delivering 8% growth in the on-premise channel – bars, restaurants, and hotels – beating the broader sector by six percentage points and finishing 2025 as the number one supplier for value growth in that channel.
Aperol and tequila each grew 15%, and that momentum carried through into measured retail sales, where the two brands together grew 10%. In the UK, sales rose 7%, driven primarily by Aperol and the company’s recently acquired Cognac brand Courvoisier.
Across the group as a whole, organic revenue grew 2.4%, with sales advancing in 24 countries – a breadth of performance that management said reflected the ability of its brands to keep pace with shifting consumer tastes in markets around the world.
Despite these impressive trends, Campari is leaving nothing to chance. It is “leaning in” on marketing efforts across both traditional and nontraditional channels.
Aperol: The Centerpiece of the Investment Push
Not surprisingly, the company’s most significant marketing effort centers on Aperol, which CEO Simon Hunt described as the “champion” brand receiving the highest share of advertising and promotional spend. In the U.S., Campari launched its first-ever “Aperolidays” holiday campaign for December 2025 featuring actress Nina Dobrev, generating 600 million earned media impressions and a 17% increase in Aperol mentions on social media versus the prior December. The company has also deployed 21 dedicated brand activators across 11 U.S. states and cities specifically to drive on-premise growth.
In the UK, the winter campaign – themed around “White Christmases are overrated” – took over London Underground stations, buses, and outdoor walls, doubled spending versus the prior year, and reached 92% of spirit drinkers in London and 21 million consumers nationally. The campaign connected Aperol with the Somerset House ice skating rink in central London as its signature activation.
Looking ahead to summer 2026, Campari confirmed a major TV-led campaign for Aperol is planned for the second and third quarters, with Hunt describing it as front-loaded – meaning the bulk of advertising spend will land in the first half of the year to drive peak-season consumption.
The company is also expanding Aperol on Tap, which it piloted in select markets in 2025, and preparing to launch canned Aperol in five countries, with Hunt teasing a summer reveal without disclosing which markets.
New Formats as a Marketing Tool
Additionally, Campari is treating new product formats as a growth and marketing lever in their own right. The Aperol ready-to-serve (RTS) format – already 6% of the total Aperol franchise – is expanding, and a new Aperol RTD is launching in the current year. A Campari Spritz RTS is also coming to market. Hunt framed these launches as a way of opening up occasions that the brand has previously been unable to reach.
Courvoisier: Building From Scratch
With a full brand relaunch strategy still being finalized, Campari has been running interim campaigns for Courvoisier cognac in the UK, focused on recruiting younger consumers. Hunt reported a seven percentage point increase in brand penetration among 18- to 35-year-olds in the UK as an early result. A broader relaunch will be announced once the strategy is complete, with Hunt saying the team was not rushing but was encouraged by early momentum.
Espolòn Tequila
In the U.S., Campari has been activating Espolòn tequila heavily through cultural events and social media, including a presence at ComplexCon in Las Vegas, the New York City Halloween Parade, the Latin Grammy Awards, and Dia De Los Muertos celebrations in Los Angeles, as well as drone shows in Austin and LA that generated over one million impressions.
The Broader Investment Philosophy
Hunt was explicit that Campari intends to keep increasing its advertising and promotional spend as a percentage of sales – it stood at 17.9% in 2025, up 100 basis points – and signaled that a further increase is planned for 2026. He framed the current environment, in which some competitors are pulling back on marketing investment, as an opportunity to gain disproportionate returns by staying aggressive.
Although Aperol is leading Campari sales growth, the company’s other premium brands are contributing to the momentum. That’s no accident. Over the past two decades, Campari has methodically transformed itself from a single-brand operator into a portfolio of more than 50 premium and super premium labels. Acquisitions of Wild Turkey, Grand Marnier, Espolòn, and Courvoisier expanded its presence in bourbon, orange liqueurs, tequila, and ultra-premium cognac.
This portfolio supports a premiumization strategy that aligns with the “drink less, but better” trend that is shaping consumer behavior. Young consumers in particular are moving away from “drinking a lot” to “drinking well” – a trend Campari is leading.
As Campari’s marketing efforts gain traction, I expect the company’s profit margins to expand rapidly and deliver a much higher percentage of sales to the bottom line. Today, Campari’s operating margin is close to a 25-year low of 13%, which is more than 30% below its 10-year average. This relative weakness – in addition to fears over Gen Z drinking demand – is a big part of the reason why the stock tumbled more than 60% from its peak in November 2021 to its low in early 2025.
But if the company can begin generating mid-to-high single-digit organic revenue growth, coincident with expanding profit margins, it could produce surprisingly strong earnings growth. In hard numbers, I believe Campari will generate earnings of $0.40 per U.S.-traded share in 2026 and more than $0.50 in 2027.
At that level of profitability, the stock would be trading for 18 times 2026 earnings and just 14 times the 2027 result. For perspective, the stock has averaged about 34 times earnings during the last 10 years.
In short, Campari offers more than a stake in a drinks company – it provides exposure to a portfolio of culturally resonant, premium brands. This portfolio delivers category diversification and resilience, while the company’s marketing sophistication, operational discipline, and digital capabilities position it to continue outpacing the industry.
And to address the tech elephant in the room, Campari has almost nothing to do with the hottest investment trend of the moment: AI – a seeming deficiency, but actually a strength. The company falls into the “AI Survivor” category precisely for this reason.
The more that AI dehumanizes our daily lives, the more we humans will crave innately human experiences… like sipping (and photographing) a heart-warming orange cocktail.
In other words, Campari produces more than spirits. It produces a unique and valued human experience.
Action to Take:
Buy the U.S.-trade shares of Davide Campari-Milano NV (DVCMY) below $7.65. Use a “limit” order, not a “market” order.
A word of caution: This stock does not trade actively in the U.S., but it does trade actively enough to accommodate the modest surge of “Buy” orders this recommendation could produce.
That’s why it is important to use a “limit” order when entering this trade. If you enter a “market” order, you might pay a price that is well above my $7.65 limit.
10X AI Survivor No. 2
A Growth Story Worth Toasting
Fevertree Drinks Plc (FEVR.L) is a fashion brand that happens to make cocktail mixers like tonic water. The mixer company has transformed what was once an overlooked category into a “premiumized,” trend-forward staple of global cocktail culture.
Known as Fever-Tree, the London-based company isn’t simply selling tonic water or ginger beer. It is selling sophistication, social identity, and cultural participation… and it is succeeding.
A decade ago, few drinkers gave much thought to what mixers went into their gin and tonic or Moscow mule. Spirits commanded the spotlight; mixers stood in the wings like stagehands.
Fever-Tree changed that script. By using natural ingredients, elegant packaging, and the aura of connoisseurship, the company elevated mixers to co-star billing.
That repositioning coincided with the rise of the “drink less, but better” ethos. Millennials and Gen Z drink more selectively, favoring higher-quality products with lower alcohol, or none at all.
What Campari achieved with Aperol – turning a liqueur into a cultural icon – Fever-Tree has achieved with mixers. Its bottles signal quality and style, while its marketing and collaborations reinforce that aura. From airports to music festivals, Fever-Tree has seeped into drinking moments everywhere.
Consumers increasingly crave experiences that feel intentional, stylish, and healthier. Fever-Tree delivers all three. It is the premium brand at the heart of the long-mix renaissance, the sophisticated answer to the nonalcoholic trend, and the shorthand for quality in cocktails.
Like Aperol, Fever-Tree mixers have become a symbol of light, photogenic indulgence. In fact, the two often share the same cocktail glass. At fashionable bars, an Aperol Spritz without Fever-Tree soda water feels “down market.”
In that sense, the brand has become embedded in the cultural fabric of modern socializing. Consumers aren’t asking for mixers; they’re asking for premium experiences, which is exactly what Fever-Tree attempts to provide.
As Fever-Tree CEO Tim Warrillow put it:
Global trends in the beverage sector are firmly in Fever-Tree’s favor, and we believe that we are uniquely positioned to take advantage of all the trends across adult socializing – from traditional mixing to lower ABV, to nonalcoholic options.
The Tailwinds of Health, Moderation, and Occasion
Three main trends are powering Fever-Tree’s growth trajectory…
First, many modern drinkers are migrating toward low-calorie cocktails that contain relatively low alcohol content – generally less than 5% alcohol by volume (ABV). Therefore, they tend to prefer spritzes and cocktails that balance alcohol with refreshing, lighter mixers.
Fever-Tree’s portfolio – tonics, sodas, ginger beer – fits seamlessly into this movement. Its recently launched Blood Orange Spritz (5% ABV, 107 calories) demonstrates the company’s commitment to this evolving sensibility. Fever-Tree launched this RTD product in collaboration with actress Margot Robbie’s “Papa Salt Coastal Gin” brand.
Secondly, as the “drink better” trend enables spirits like tequila, gin, and whiskey to steal “alcohol share” from beer and wine, it expands the canvas for all mixers. Fever-Tree has the palette of products to maximize that opportunity.
Third, the nonalcoholic beverage category is gaining cachet. It is no longer just an afterthought as a nonalcoholic version of a traditional cocktail. Consumers no longer want a soda or sugary juice when skipping alcohol – they want something refined. Fever-Tree’s positioning as a “grown-up” soft drink gives it enormous potential in this space. Often, its cans of ginger beer or sparkling pink grapefruit never see the inside of a cocktail glass, which shows they can transcend their “mixer” roots.
Warrillow underscores the brand’s unique positioning:
There is no brand better placed to satisfy consumers’ new and evolving expectations than Fever-Tree. Our credentials as a sophisticated, high-quality product make us the number one premium mixer globally.
The Tonic for Growth: Brand Extensions
The global resurgence of the gin and tonic cocktail helped launch Fever-Tree as the go-to brand of tonic water. But the company is expanding its reach by introducing strategic brand extensions. Today, non-tonic products account for nearly 30% of U.K. sales, and that share is climbing elsewhere.
Ginger beer, for example, is now a top growth driver in both Europe and North America. Additionally, Fever-Tree’s premium canned formats have proven popular in markets like Australia and Canada, extending the company’s presence into “adult soft drink” occasions.
This diversification spreads risk across occasions and spirits, reinforcing the broader positioning: a premium mixer for every spirit.
Unfortunately, for all its strengths, the company has struggled to build a robust distribution network in the U.S. As a result, its product line sometimes seemed “all dressed with nowhere to go.”
But thanks to a February 2025 distribution agreement with Molson Coors Beverage Co. (TAP), Fever-Tree products now have lots of places to go. The agreement hands Fever-Tree access to 500,000 accounts, 30,000 daily delivery points, and U.S.-based production. Molson also bought an 8.5% stake in Fever-Tree for $95 million.
Recent financial results for Fever-Tree demonstrate that the Molson tie-up is already paying dividends. Reported revenue fell 12% to £325 million, which sounds alarming until you understand why. Fever-Tree restructured its entire U.S. business in 2025, handing distribution rights to American brewing giant Molson Coors. Under the new arrangement, Fever-Tree now receives royalty payments – a share of the profits – rather than recognizing every bottle sold as its own revenue.
Strip out that accounting change, and the underlying business actually grew 2% to £375 million, with brand revenue up 4% on a like-for-like basis. Pre-tax profit fell 16% to £29.9 million, largely reflecting the transition costs of setting up the new partnership and higher central overheads.
Importantly, Fever-Tree continues to gain market share. Emphasizing that favorable trend, Warrillow remarked:
As we enter 2026, Fever-Tree does so from a position of strength. We have a premium brand with unmatched credentials, an ever-growing market leadership position, upweighted marketing plans, a broader and more relevant portfolio, and scalable platforms in place across our priority markets.
The Molson Coors Bet
The centerpiece of Fever-Tree’s growth story – and the main reason investors appear willing to look past the short-term profit dip – is the partnership with Molson Coors. It is the single most important catalyst for the company’s future, and the timing couldn’t be better.
Because large distributors in the U.S. are watching their beer volumes decline quarter after quarter, they are actively looking for premium non-alcoholic brands to replace that lost business. Fever-Tree, it seems, fits that bill perfectly.
From April 2026, Molson Coors will launch what Warrillow described as the largest marketing campaign in Fever-Tree’s history in the United States – roughly double the brand’s previous U.S. advertising spend. For the first time, that will include national television commercials, alongside digital, outdoor, sports sponsorships, and sampling activations. The central message – that Fever-Tree is the mixer bartenders reach for – is designed to build the kind of broad consumer awareness the brand has long enjoyed in Britain, but has yet to fully establish across the Atlantic.
“Importantly,” the analysts wrote, “earnings over the next three years are materially underpinned by the guarantees provided by Molson Coors.” In other words, even in a worst-case scenario, Fever-Tree has a financial floor under its U.S. business for the foreseeable future – precisely the kind of downside protection we flagged as a key attraction of the stock.
The Bottom Line
Fever-Tree is navigating a genuinely complex moment – absorbing the short-term costs of a major strategic restructuring, while simultaneously laying the foundations for what it hopes will be a step-change in U.S. growth.
Thus far, it appears to be fulfilling its promise by turning the American market into a high-growth, transformational opportunity for Fever-Tree.
I expect the company’s “U.S. invasion” to continue gaining momentum, which is the main reason I believe the stock offers an outstanding investment opportunity at the current quote.
As a result, I expect the company to post earnings per London-traded share of at least 29 pence in 2026, and 38 pence per share in 2027. If the company hits those marks, the stock would trade for 29 times current-year earnings and 21 times the 2027 result.
One parting thought…
In a world obsessed with artificial intelligence, Fever-Tree offers something authentically human. Algorithms can code, parse, and predict, but they cannot replicate the pleasure of sipping, sharing, and/or “TikToking” a Fever-Tree spritz on a summer evening.
That’s why Fever-Tree falls squarely into what I call the “AI Survivor” category – companies that will thrive, precisely because they provide what AI cannot: genuine human experience.
Davide Campari-Milanois a kindred spirit. Both companies are reminders that in the age of machines, some of the most enduring investments may come from the simple joys AI will never touch.
Action to Take:
Buy Fever-Tree Drinks Plc (FEVR.L) below 1025 British pence.
This stock also trades in the U.S. over-the-counter market under the symbol “FQVTY.” But those shares do not trade actively, so I’m recommending that you purchase the shares that trade on the London Stock Exchange. Brokerage firms like Fidelity and Schwab can trade these securities just as easily as they trade Apple Inc. (AAPL).
However, you would need to request permission to trade international securities if you have not already done so. Once you purchase Fever-Tree in London, you can choose to settle the trade back into U.S. dollars or continue holding the stocks in euros. The economic impact is identical either way.
Two final notes…
- The London Stock Market is open for business from 3 a.m. to 11:30 a.m. Eastern. So, please keep those hours in mind when entering an order.
- One U.S. dollar currently equals about 74 British pence. Therefore, if you were to buy 1,000 shares of Fever-Tree at 950 British pence, that trade would cost about $12,838 (i.e., 950 times 1,000 divided by 74 = $12,838).
10X AI Survivor No. 3
A Major South American Oil Producer
In order to power our AI future, we need “electrified real estate.” Essentially, we need the power to plug in massive data center sites at scale.
As the big tech companies build ever-larger and ever-more-numerous data centers, they are struggling to secure the dedicated power supplies these centers require. So, they are turning to every and any possible power source to satisfy their needs. Nuclear power. Hydrogen fuel cells. Oil and gas.
This is a boon for all energy companies powering the next leg of the AI Revolution, especially for Argentina’s national oil company, YPF SA (YPF).
Three factors make the stock a timely buy right now…
Factor No. 1: A Safe Harbor in a World on Fire
While American and Israeli jets bomb Iran into the Stone Age – erasing roughly 12% of global oil reserves from the reliable-supply column – and U.S. forces conduct strikes across Somalia, Nigeria, Yemen, and Venezuela, Argentina sits quietly in the Southern Hemisphere. Its oil fields are not threatened by missiles. Its export routes do not pass through contested straits. YPF’s massive hydrocarbon reserves in the Vaca Muerta formation are thousands of miles from the nearest active conflict zone.
Against that backdrop, Argentina looks less like a basket case and more like a backwater – and in the current environment, backwaters have a certain appeal. Yet YPF shares have barely budged year-to-date, even as crude has jumped above $100 a barrel and many oil stocks have soared more than 40%. That conspicuous lag won’t last forever.
Factor No. 2: Politics as a Valuation Tailwind
YPF doesn’t need a new oil discovery or a sudden price spike to earn a higher valuation. It needs investors to believe Argentina will continue moving toward a more predictable operating environment – clearer rules, more rational pricing, better access to capital, and a credible path to hard currency.
That process is underway. President Javier Milei’s administration has spent two years implementing liberalization reforms, notching legislative wins, and building large-investment frameworks designed to protect capital-intensive projects. None of this erases Argentina’s past, but it does shine a promising light on the country’s future.
The valuation math is striking: YPF currently trades at less than four times EBITDA, while Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) command triple that multiple. If YPF narrowed that gap even slightly, its share price could double. Political normalization compresses the discount rate. The denominator moves first – and it’s already moving.
Factor No. 3: Vaca Muerta: A Shale Factory Finally Acting Like One
The real investment case, however, is what’s happening on the ground in Patagonia. Vaca Muerta is one of the world’s premier shale formations – roughly 308 trillion cubic feet of technically recoverable shale gas (rivaling Saudi Arabia’s entire proven gas base) and approximately 16 billion barrels of shale oil, placing it alongside the Permian, Eagle Ford, and Bakken.
Geology was never the problem. Execution was.
YPF is now fixing that. Over the past two years, management exited mature conventional fields that drained capital, redirected investment toward shale, and ramped production aggressively. The results show up in the cost structure: For the full year 2025, lifting costs fell 26% to $11.6 per barrel of oil (BOE), and in the fourth quarter alone they dropped 44% year-over-year to $9.6 per BOE. On a pro forma basis – stripping out the recently divested Tierra del Fuego and Manantiales Behr blocks – lifting costs would have fallen below $8 per BOE.
At the shale hub level, lifting costs held at a best-in-class $4.4 per BOE, numbers that place YPF firmly in the global shale conversation – below the Permian Basin average of $4.9 per BOE, according to a Rystad Energy benchmark analysis. A real-time intelligence center now supervises drilling and fracturing operations using predictive algorithms, driving faster wells, fewer errors, and lower fixed costs per barrel as volumes scale.
For the full year 2025, shale oil output grew 35% to an average of 165,000 barrels per day, and accelerated sharply in the fourth quarter, averaging 196,000 barrels per day.
By December, production surpassed 200,000 barrels per day, exceeding management’s own year-end target by roughly 7%. Less than two years earlier, shale output was barely more than half that level.
These impressive operational gains drove a record-high annual EBITDA of $5 billion – the strongest in a decade – even as Brent crude oil prices fell 15% during the year.
The transformation of a single block illustrates the broader story. La Angostura Sur went from roughly 2,000 barrels per day a year ago to more than 35,000 by October 2024, with management targeting a plateau above 80,000. The block breaks even below $40 per barrel, already generates pro forma annual EBITDA above $500 million, and has less than 15% of its roughly 350 wells developed. That’s a multi-year runway embedded inside one asset.
Importantly, YPF has barely scratched the surface of the Vaca Muerta’s potential. According to Rystad, shale oil estimated ultimate recovery in Vaca Muerta averages roughly one million barrels per well at its current stage of development – more than double the average of U.S. shale plays. YPF’s core hub blocks, including La Angostura Sur, average between 1.2 and 1.5 million barrels per well.
Looking ahead, management is guiding for shale oil production of roughly 215,000 barrels per day in 2026, with a year-end exit rate of approximately 250,000 – more than double 2023 output. EBITDA is forecast in the range of $5.8 billion to $6.2 billion, based on an average Brent price of $63 per barrel. That would represent a hefty 40% to 50% increase over 2023 levels and a new all-time record – achieved, remarkably, in a softer oil price environment.
Distilling these results to the per-share earnings level, YPF is on track to post earnings per share of roughly $3.60 this year, then soaring to $4.75 next year and more than $6.20 in 2028. If the company hits those targets, the stock would trade at just 11 times this year’s earnings, eight times 2027 earnings, and less than six times the 2028 result.
This powerful growth trajectory could gain a massive tailwind later in the decade, as YPF’s ambitious liquified natural gas (LNG) project moves from the drawing board to full operation.
Here’s the backstory…
Argentina has long suffered a paradox: abundant gas, limited export infrastructure, and domestic pricing that capped value. A major pipeline-to-coast project, backed by partners including Eni and ADNOC’s investment arm XRG, aims to convert Vaca Muerta gas into dollar-denominated cash flow via floating LNG vessels.
The three founding partners formalized the project’s structure this month by signing a Joint Development Agreement. The full project envisions 12 million tons per year of liquefaction capacity through two floating LNG vessels, with a total capital cost of approximately $20 billion, roughly 70% of which is expected to be project-financed. Management targets a final investment decision in 2026, with the first cargo around 2030 and a second unit following in 2031. Markets reprice on milestones, not first cargo.
One genuine risk deserves mention: A 2023 U.S. federal court judgment ordered Argentina to pay roughly $16 billion stemming from the 2012 renationalization of YPF, with enforcement orders that could affect the company’s ownership structure.
However, the lawsuit targets the Argentine state, not YPF’s operations – and in late 2025, an appeals court signaled it might overturn or narrow the judgment. Resolution in either direction would remove an annoying overhang for the stock.
YPF’s most underappreciated achievement isn’t how much it produces – it’s how cheaply it produces it. Management linked cost improvements directly to three decisions: exiting mature fields, scaling shale volumes, and enforcing daily operational discipline with modern technology.
A Safe Haven in the Oil World
The geopolitical environment has, paradoxically, improved the relative case for buying YPF. While the Middle East burns and global supply chains fray, Argentina sits quietly in the Southern Hemisphere – producing oil from a world-class shale formation, lowering its costs, building toward LNG exports, and slowly shedding the sovereign risk premium that has weighed on its assets for years.
Most stocks offer either a clean business at a full valuation or a messy story at a deep discount. YPF offers something rarer – a messy discount just as the business cleans itself up. The market still prices YPF as if the old Argentina always wins. The company’s operations increasingly suggest otherwise. That gap is where the opportunity lives.
As I stated at the top of this report, there is nothing we can do to stop the AI Revolution. An oil company like YPF represents one avenue for investing in the AI Survivor sphere. While demand for energy sources extends beyond AI, it also drives AI’s presence.
Action to Take:
Buy YPF SA (YPF) below $46.
Regards,
Eric Fry
