Energy and Material stocks are sleepy no more. The war in Iran and the simultaneous race to advance AI have created an enormous need for energy and materials. Demand is up and so is attention on the stocks that supply the power and the materials needed. First, oil and energy companies have benefited from the effort to hedge against oil-supply constraints due to the war and the intermittent closures of the Strait of Hormuz. Year to date, the price of oil has swung from $60 to $110 and is now at around $78. The elevated prices have contributed to the profits of oil and energy companies as they race to accommodate demand. At the same, materials and energy are needed to fuel the growing appetite of AI. Companies involved in the many tiers of AI development are investing in the future by building energy and data storage facilities, as well as the semiconductors and subcomponents that are needed for parts. Argus has a Market-Weight rating on the Energy sector, which comprises 4% of the S&P 500. The sector is the best performing in the S&P 500, up 30% versus 13% for the S&P 500. Meanwhile, we have an Over-Weight rating on the Materials sector, which makes up just 2% of the S&P 500. The Materials sector is also outperforming, up 15%. We just highlighted the Energy and Materials sectors in our monthly webinar, including our stocks that stand to benefit from the above forces. For this week's list, we present the BUY-rated stocks discussed during the webinar.

Based in Mentor, Ohio, Avery Dennison Co. generates revenue through the sale of adhesive materials, logo branding solutions, and inventory tracking solutions (RFID tags). The company's products are used in a range of industries, including retail, automotive, industrial, and healthcare. The company has 35,000 employees and operates in more than 50 countries. AVY shares are a component of the S&P 500.

The stock market was smacked a bit on Wednesday, but the major semiconductor ETFs (SMH and SOXX) still rose 0.9% and 1.8%, respectively. So maybe there's nothing to worry about. Crude oil (WTI) popped another 2.5% in late-day trading to $96.40/barrel, while Brent rose just over 2% to $98/barrel. If WTI breaks above $100 looking out a week, it will bust through the declining trendline off the peaks since April 7. That would most likely nullify a bearish diamond top and open the door for another leg higher -- and potentially new highs for the current rally above $120. Treasury yields won't be happy with that, and the combination will not be equity friendly.

Based in Mentor, Ohio, Avery Dennison Co. generates revenue through the sale of adhesive materials, logo branding solutions, and inventory tracking solutions (RFID tags). The company's products are used in a range of industries, including retail, automotive, industrial, and healthcare. The company has 35,000 employees and operates in more than 50 countries. AVY shares are a component of the S&P 500.