Bank of America predicts positive outlook for two stocks in the energy sector

With the growing boom in artificial intelligence, which requires a large data center with high-speed computing power and huge databases, the demand for energy is growing. This infrastructure, necessary to support AI technologies, brings with it high energy demands, which translates into increased energy consumption.

Bank of America (BofA) has now identified two natural gas stocks that could grow significantly in the coming years, thanks to the new energy market setup and increased demand.

Gulfport Energy $GPOR

Gulfport Energy is an independent natural gas producer in North America, with active operations in the Marcellus and Utica shelf areas of eastern Ohio and the Oklahoma SCOOP. In the most recent quarter, 3Q24, Gulfport reported average production of 1,057.2 MMcfe per day, 91% of which was from natural gas. The company boasts a solid financial performance, with revenues of $253.9 million and net free cash flow of $72.6 million.

BofA analyst, Noah Hungness, rates GPOR stock as a strong buy with a target price of $227, which equates to 16% upside potential for the year. Given the positive results the company is achieving, it has a high chance of success in the coming months.

Range Resources Corporation $RRC

Range Resources is focused on natural gas production in the Marcellus Shale region of Pennsylvania. In 3Q24, the company generated revenue of $680.17 million and recorded a 5% year-over-year growth. Range Resources has a strong inventory and optimistic prospects for expanded production, which strengthens its position in the energy sector.

BofA analyst, Kalei Akamine, expressed a positive view on Range Resources stock with a target price of $45, which corresponds to a potential upside of 10% for the year. Given the quality reserves and steady growth in the natural gas sector, Range Resources appears to be a strong candidate for investors looking for steady growth.

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