Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on LandBridge Company LLC (LB) on Substack by FJ Research. In this article, we will summarize the bulls’ thesis on LB. LandBridge Company LLC (LB)'s share was trading at $69.12 as of May 8th. LB’s trailing and forward P/E were 30.95 and 21.60 respectively according to Yahoo Finance.
Aerial view of an oil and natural gas drilling operation on a leasehold position.
LandBridge stands out as a quietly compelling opportunity at the intersection of energy security and AI infrastructure. In a market that has turned politically and institutionally cold toward oil, the fundamentals remain unchanged: global demand for oil is not going away, and scalable alternatives are not ready to take over. This disconnect creates fertile ground for companies like LandBridge, which don’t bear the risk of drilling but benefit from ongoing production volumes. LandBridge owns over 273,000 surface acres in the Permian Basin — the most prolific oil-producing region in the U.S. — and monetizes this land through a royalty model that echoes the success of Texas Pacific Land (TPL), a legendary compounder. However, LandBridge offers more than just royalties. It owns WaterBridge, a critical and underappreciated water infrastructure platform that serves the region’s fracking and wastewater disposal needs, and increasingly, cooling for hyperscale data centers.
This last use case introduces the third — and perhaps most transformative — leg of LandBridge’s business: AI infrastructure. West Texas isn’t just oil-rich, it’s power-rich, offering stable, low-cost electricity ideal for powering large-scale data center campuses. LandBridge is already moving on this front, with plans to build a 1-gigawatt data center hub alongside solar and power infrastructure — a massive opportunity to capitalize on the rising demand for compute power driven by AI and cloud growth. While TPL is now a $13+ billion company widely held by institutions, LandBridge, with a market cap under $2 billion, is earlier in its lifecycle and arguably offers greater upside through a more diversified value stack of oil, land, water, and data infrastructure.
Insider alignment further strengthens the investment case. Chairman David Capobianco owns over 100 million shares, signaling deep commitment and skin in the game. Management has demonstrated strategic acumen with its $245 million acquisition of 46,000 additional acres in the Southern Delaware Basin in late 2024 — expanding its cash-generating footprint while peers pulled back. Importantly, this is not a speculative energy trade based on oil prices; LandBridge’s revenues are tied to production volumes, offering resilience regardless of WTI volatility.
