Markus Andrews

Warren Buffett has advice for all parents: let your adult children read your will before you sign it.
“Be sure each child understands both the logic for your decisions and the responsibilities they will encounter upon your death,” Buffett wrote in a letter Monday.

Warren Buffett, chairman and CEO of Berkshire Hathaway Inc
Daniel Zuchnik | Contributor | Getty Images

‘Tough conversations’ that ‘strengthen relationships’

Douglas Boneparth, a certified financial planner, agreed with Buffett’s advice to reveal your estate plan.
“These are tough conversations to have, but they’re meaningful and when approached correctly, can strengthen relationships,” said Boneparth, who is founder and president of Bone Fide Wealth in New York City and a member of CNBC’s Advisor Council.
You want your children to have realistic expectations about their inheritance, Boneparth said.

“Kids’ imagination can run wild with what they think they should be getting,” he said. As a result, you should be as clear and thorough as possible about who will receive what and why.
People might worry about hurting their kids’ feelings, or hearing from one that they think something is unfair. Well, that’s exactly why you want to discuss it, and not “punt that mess for when you’re not around,” Boneparth said.

Kids’ imagination can run wild with what they think they should be getting.

Douglas Boneparth
a certified financial planner

In his letter, Buffett recalled that over the years he witnessed “many families driven apart after the posthumous dictates of the will left beneficiaries confused and sometimes angry. Jealousies, along with actual or imagined slights during childhood, became magnified.”
If the inheritance is not split equally between siblings, you’ll want to explain why, Boneparth said. Maybe one child will receive more because another got help with a down payment on a house or attended a far more expensive college, he said. A child with a spending problem might inherit a trust, Boneparth added, in which they receive their bequest in regular installments.
If one child is in a much better financial situation than another, you might explore with the more comfortable one if they’d be OK with you leaving them less, said CFP Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida.

Aitor Diago | Moment | Getty Images

You might ask the well-off child, McClanahan said, “‘Do you really care how I leave our assets? Because your brother is an artist and could use a little more help.'”
“That way that child is not slighted when they actually find out,” she said.
In Buffett’s letter, he writes: “There is nothing wrong with my having to defend my thoughts. My dad did the same with me.”

When ‘sharing that information can be damaging’

Buffett’s point that adult children should be invited to weigh in on the will is usually a good one, said McClanahan, who is also a member of CNBC’s Advisor Council.
“When you’re creating your estate document, ask your children in advance what’s important to them,” McClanahan said. “That way, you can keep that in mind.”

In rare cases, it’s best for parents to withhold certain information in their will, McClanahan said.
For example, she would recommend a parent be more cautious if a child has exploited them financially. Meanwhile, if a child is irresponsible with jobs or money, learning that they stand to inherit a lot may further erode their work ethic and ambition, McClanahan said.
“If you have children who are not mature, sharing that information can be damaging,” she said, adding that she may recommend clients in these situations write a letter to their children, which they won’t see until after they’ve died, explaining their estate decisions.
“Every family is different,” McClanahan said. “That’s why there should be no set rule.”

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Chip Leighton’s “teenager texts” on social media hilariously call out questions from kids to their parents, such as “Do I need to tip the eye doctor?” or “Hey, is the ATM going to be open later?”
Leighton says it’s not necessarily that today’s kids know less about money-related topics, it’s just that these questions are more likely documented now.
Still, there is a growing push to teach financial literacy in schools.

Chip Leighton’s viral ‘teenager texts’ highlight how little some kids know about money.
Courtesy: Chip Leighton

Chip Leighton knows how funny kids can be.
Social media posts by the creator of “The Leighton Show,” which have collectively been seen more than 250 million times, hilariously highlight some of the texts teenagers send their parents. Many are related to money.

“A mom told me the other day that when she told her teenager that she’d registered for a 401(k) at her new job, the response was ‘How much is that in miles?'”
Leighton, who has two children of his own, receives thousands of messages from parents of teenagers across the country — some of which he uses for content. “There’s definitely a lot of good money ones,” he said.
Often questions are the most basic, from “Do I need to tip the eye doctor?” to “Hey, is the ATM going to be open later?”
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Leighton said it’s not necessarily that today’s kids know less about financial topics, it’s simply that these questions are more likely documented in a text now.

“I tell parents not to sweat it, but there are a few doozies in there,” he said.
Among other recent queries: “What is generational wealth and why don’t we have it?” and “Do I have a trust fund?” Another classic: “What is my net worth?”
His new book, “What Time Is Noon?,” covers some of the best — or worst — texts from teenagers.
One section is devoted entirely to money-related topics, often related to a first job or taxes. With no shortage of material, a sequel is likely to follow, he said.
Leighton retired from a corporate career last year. Being a social media content creator is now his full-time second act.

The value of learning financial basics

In many ways, these could be teachable moments, Leighton said — and there has been growing momentum to cover these topics in high school.
As of 2024, only half of all states require or are in the process of requiring high school students to take a personal finance course before graduating, according to the latest data from Next Gen Personal Finance, a nonprofit focused on providing financial education to middle and high school students.
“In the absence of a national or state-wide strategy to teach youth about personal finance in schools,” there is something to be said for online communities that “openly talk about money and finances,” said Billy Hensley, NEFE’s president and CEO. Hensley is also a member of the CNBC Global Financial Wellness Advisory Board.
However, there should an “overall strategy for your individual financial management,” he said.

Further, students with a financial literacy course under their belt have better average credit scores and lower debt delinquency rates as young adults, according to data from the Financial Industry Regulatory Authority’s Investor Education Foundation, which promotes financial education.
In addition, a 2018 report by the Brookings Institution found that teenage financial literacy is positively correlated with asset accumulation and net worth by age 25.
Among adults, those with greater financial literacy find it easier to make ends meet in a typical month, are more likely to make loan payments in full and on time and less likely to be constrained by debt or be considered financially fragile.
They are also more likely to save and plan for retirement, according to data from the TIAA Institute-GFLEC Personal Finance Index based on research collected annually since 2017.

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Americans tend to overspend during the holiday shopping season, and this year will be no different, according to forecasts.
Millennials, many of whom are now parents of school-age children, are leading the charge, a new survey says.
However, leaning on credit cards or buy now, pay later plans to purchase gifts will come at a high cost if those balances aren’t paid off quickly.

Parents tend to splurge on their children during the holidays.
This year, 63% of millennials, many of whom now have school-age children of their own, said they plan to spend the same or more on holiday shopping as they did last year — the highest share of any generation, according to a quarterly report by TransUnion.

Millennials are also more likely to say their income went up over the last few months and that they expect their earnings potential to increase again in the year ahead. TransUnion polled 3,000 adults in October.
“I see a lot of optimism going into the holiday season,” said Charlie Wise, TransUnion’s senior vice president and head of global research and consulting.
For many in this group, recent wage gains have outpaced rising prices and, although the broader unemployment rate has ticked higher, “we are still seeing a steady employment situation,” Wise said. “When people have jobs, that confidence is going to translate into spending.”
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“It’s clear that millennials will play the largest role this holiday shopping season with the greatest expected spend,” Wise said.

Holiday spending between Nov. 1 and Dec. 31 is forecast to increase to a record total of $979.5 billion to $989 billion, according to the National Retail Federation.
Even as credit card debt tops $1.17 trillion, holiday shoppers expect to spend, on average, $1,778, up 8% compared with last year, Deloitte’s holiday retail survey found.
Meanwhile, 28% of holiday shoppers surveyed in September said they still had not paid off the gifts they purchased for their loved ones last year, according to a holiday spending report by NerdWallet, which polled more than 1,700 adults.  

Holiday spending may lead to holiday debt

While most shoppers — 74% — use credit cards to buy holiday gifts, 28% will dip into savings to make their purchases, and 16% will lean on buy now, pay later services, NerdWallet found. Survey respondents could choose multiple payment methods.
Buy now, pay later is one of the fastest-growing categories in consumer finance and is expected to become more popular in the weeks ahead, according to the most recent data from Adobe. Adobe forecasts buy now, pay later spending will peak on Cyber Monday with a new single-day record of $993 million.
However, managing multiple buy now, pay later loans with different payment dates may make it more likely for consumers to get in over their heads, some experts have cautioned — even more than with credit cards, which are simpler to account for, despite sky-high interest rates.

Sometimes, the option to pay in installments can make financial sense, especially at 0% interest, according to Marshall Lux, a senior fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School.
“If used properly, it’s great,” Lux said.
“But a lot of people are going to spread out purchases over a longer period of time and then you get into high interest and a cycle of debt,” he said.
The more buy now, pay later accounts consumers have open at once, the more prone they become to overspending, missed or late payments and poor credit history, other research shows.
If a consumer misses a payment, there could be late fees, deferred interest or other penalties, depending on the lender. In some cases, those interest rates can be as high as 30%, rivaling the highest credit card charges. 
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An Exxon Mobil gas station in Washington, D.C., on Nov. 28, 2023.
Al Drago | Bloomberg | Getty Images

With the Federal Reserve now on a rate-cutting campaign, dividend stocks may soon get their moment in the spotlight.
Investors looking for lucrative dividend-paying stocks can track the recommendations of top analysts, who consider various aspects like a company’s fundamentals and consistency in dividend payments before selecting a stock.

Here are three dividend-paying stocks, highlighted by Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.

Exxon Mobil

This week’s first dividend pick is oil and gas giant Exxon Mobil (XOM). The company recently announced better-than-anticipated third-quarter results, driven by a solid rise in production. It is worth noting that the company achieved its highest liquids production in over 40 years with 3.2 million barrels per day.
The dividend aristocrat returned $9.8 billion to shareholders in the third quarter. Moreover, the company increased its quarterly dividend by 4% to 99 cents per share. With this hike, Exxon has increased its dividends for 42 consecutive years. XOM stock offers a forward dividend yield of 3.3%.
Following the Q3 print, Evercore analyst Stephen Richardson reiterated a buy rating on Exxon stock with a price target of $135. The analyst noted that the company’s strategy to invest through the cycle trough and boost spending on major projects and acquisitions like that of Pioneer Natural Resources boosted the prospects of its Upstream business.
“The benefit of incremental investments and perhaps more importantly the high grading of the asset base has put XOM on a different competitive footing vs. the industry but also vs. its own historical results,” said Richardson.

The analyst noted that the company’s cash flow from operations, excluding working capital changes, of $15.2 billion was flat on a quarter-over-quarter basis but exceeded his expectations by nearly $1.1 billion. He also highlighted that Exxon’s net debt declined by $1.1 billion in the quarter, reflecting $2.3 billion of net working capital inflow.
Richardson ranks No. 924 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, delivering an average return of 9.6%. See Exxon Ownership Structure on TipRanks.

Coterra Energy

We move to another energy player, Coterra Energy (CTRA). It is an exploration and production company with operations focused in the Permian Basin, Marcellus Shale and Anadarko Basin. In the third quarter, shareholder returns represented 96% of the company’s free cash flow (FCF) and included a quarterly base dividend of 21 cents per share and share repurchases worth $111 million. 
Coterra Energy aims to return 50% or greater of its annual FCF to shareholders and recently highlighted that it has returned 100% year to date. CTRA stock offers a dividend yield of 3%.
On Nov. 13, Coterra announced two separate definitive agreements to acquire certain assets of Franklin Mountain Energy and Avant Natural Resources and its affiliates for a total amount of $3.95 billion. The company thinks that the acquisition of these two Permian Basin asset packages will expand its core area in New Mexico and boost its organizational strengths.
Reacting to the news, Mizuho analyst Nitin Kumar reaffirmed a buy rating on the stock with a price target of $37 and a “Top Pick” designation. He said that while the assets being acquired are less attractive than Coterra’s existing Permian inventory on the basis of pure well productivity, their higher oil mix and lower well costs offset this shortcoming.
While Kumar thinks that these acquisitions are not transformative, he remains bullish on CTRA’s long-term prospects and thinks that “as the lowest-cost producer of gas, CTRA should be able to support above-peer cash generation even at lower prices or wide differentials, which complement oil-driven FCF from the Permian.”
Kumar ranks No. 187 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 64% of the time, delivering an average return of 14.3%. See Coterra Energy Stock Charts on TipRanks.

Walmart

Finally, let’s look at Walmart (WMT). The big-box retailer delivered impressive third-quarter results and raised its full-year guidance, thanks to the strength in its e-commerce business and improvement in categories beyond groceries.
Earlier this year, Walmart raised its annual dividend per share by about 9% to 83 cents per share, marking the 51st consecutive year of dividend increases.
Following the results, Jefferies analyst Corey Tarlowe increased the price target for WMT stock to $105 from $100 and reaffirmed a buy rating. The analyst noted that the company’s same-store sales continued to be fueled by increased transactions, higher unit volumes and favorable general merchandise trends.
Tarlowe highlighted that improvement in Walmart’s margins helped deliver better-than-expected earnings in the quarter. Specifically, WMT’s Q3 gross margin improved by about 20 basis points due to several reasons like increased e-commerce profitability, inventory management and a favorable business mix. Further, the operating margin expanded by 10 basis points, thanks to drivers like increased gross margin and higher membership income.
The analyst also noted the improvement in general merchandise sales in Walmart U.S., supported by factors such as enhanced assortment and share gains across all income cohorts. 
Overall, Tarlowe is bullish on the stock and remains “incrementally encouraged by WMT’s ability to offer customers improved value, witness robust growth, and gain share ahead.”
Tarlowe ranks No. 331 among more than 9,100 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, delivering an average return of 17.6%. See Walmart Hedge Fund Activity on TipRanks. More

Pavlo Gonchar | SOPA Images | Lightrocket | Getty Images

Company: Henry Schein (HSIC)

Business: Henry Schein is a solutions company for health care. It operates through two segments: health care distribution, and technology and value-added services. The health care distribution segment distributes an array of offerings, including consumable products, small equipment, laboratory products, large equipment and equipment repair services. The technology and value-added services segment provides software, technology and other services to health care practitioners. It offers dental practice management solutions for dental and medical practitioners. It also develops solutions for the orthopedic treatment of lower extremities (foot and ankle) and upper extremities (primarily hand and wrist).
Stock Market Value: $9.36B ($75.08 per share)

Stock chart icon

Henry Schein in 2024

Activist: Ananym Capital Management

Ownership: n/a
Average Cost: n/a
Activist Commentary: Ananym Capital Management is a New York-based activist investment firm which launched on Sept. 3. It’s run by Charlie Penner (former partner at Jana Partners and head of shareholder activism at Engine No. 1) and Alex Silver (former partner and investment committee member at P2 Capital Partners). Ananym looks for high quality but undervalued companies, regardless of industry. The firm would prefer to work amicably with its portfolio companies, but it’s willing to resort to a proxy fight as a last resort. It holds approximately 10 positions in its portfolio and currently manages $250 million.

What’s happening

On Nov. 18, Reuters reported that Ananym is pushing Henry to refresh the board, cut costs, address succession planning and consider selling its medical distribution business.

Behind the scenes

Henry Schein is a leading global distributor of health-care products and services primarily to office-based dental and medical practitioners. The company operates through two segments that offer different products and services to the same customer base: (i) health care distribution and (ii) technology and value-added services. Health care distribution covers Henry Schein’s distribution of dental and medical products, such as laboratory products, pharmaceuticals, vaccines, surgical products, dental specialty products and diagnostic tests. This segment, which accounts for 93.5% of net sales, is sub-divided between dental (61.1% of total net sales) and medical (32.4%). While the company’s primary go-to-market strategy is in its distribution capabilities, it also sells its own corporate brand portfolio of products and manufactures certain dental specialty products. In terms of scale, the company is the global leader in dental distribution and second in medical distribution to office-based physicians. Henry Schein’s other segment, technology and value-added services (6.5% of net sales) covers the sale of practice management software and other value-added products. With a market cap of roughly $9 billion, the company generates approximately $1 billion of free cash flow annually.

Despite Henry Schein’s leading market position, attractive market structure, differentiated value proposition and strong earnings power, no value has been delivered to shareholders over the past five years on a total shareholder return basis (0%, as of Nov. 15), versus 59% for the S&P 500 health-care index and 105% for proxy peers. The main source of this underperformance is relatively clear: cost control. Since 2019, the company has grown revenue at a 5% compound annual growth rate and gross profit at a 6% CAGR. But it has spent all that extra revenue and then some on operating expenses resulting in 8% annual operating expense growth and adjusted earnings before interest, taxes, depreciation, and amortization margins falling to 8% from 10%. Putting it differently, in 2019 the company had $10 billion in revenue, $3.1 billion in gross profit and $916 million in EBITDA. Today, it has $12.5 billion in revenue, $3.9 billion in gross profit and $815 million in EBITDA. Part of the reason for this is that the company has spent more than $4 billion (nearly 45% of its current market cap) on poor acquisitions that have delivered a return on invested capital well below the company’s cost of capital. Moreover, management has failed to integrate these acquisitions leading to bloated selling, general and administrative expenses. The first thing that needs to be done is for Henry Schein to execute a comprehensive cost restructuring plan of more than the $100 million the company has announced. There is a potential $300 million of actionable savings that could increase earnings per share by 35% or more.
Next, the company needs to do a better job with capital allocation. It must stop using cash flow to make acquisitions or pay back its debt that has a 6% cost and start using it to buy back stock at these prices. The company trades at a 13-times the next 12 months price-earnings multiple — near a 15-year low point. Henry Schein has stable cash flow and a strong balance sheet. Along with cash flow, it could increase net leverage to 3.0-times from 2.6-times to acquire more than 10% of its float today and 40% of its float through 2026, as opposed to the meager $300 million to $400 million of share repurchases (< 5% of market cap) it has announced for 2025. This would further increase EPS by potentially 50%. In addition to these steps, the company's medical business presents a strategic opportunity. While Henry Schein has successfully carved into the office-based physician niche as the No. 2 player, the business environment is far more competitive and will favor larger distributors. This asset could be worth $2.5 billion or more in a sale, which would be share price accretive and could be used to further repurchase the company's discounted shares. Many companies have serious issues and need an activist to endure. This is a company that does not need an activist to survive, but it would greatly benefit from an activist who could help optimize its operations and balance sheet. Henry Schein is a great company that has gotten sleepy and been allowed to coast when it could have been soaring. Part of the reason the market has allowed this is because it has been compared to its sleepy peers, Patterson and Benco. Benco is a private company and Schein's three-year return of -12% has blown away Patterson's -41%, but Schein should be benchmarking itself against the largest U.S. health-care distribution companies like Cardinal Health (+135%), Cencora (+93%), and McKesson (+173%). Perhaps not in terms of scale or end-markets, but more in aspiration and dedication to shareholders. This would require a refreshed board. Several directors have been in their seats at Henry Schein for over a decade and the board lacks best-in-class distribution expertise. A new board can come in and create a succession plan for Stanley Bergman, who has been CEO for 35 years. This is easier when the company can retain top management. But under the current board, the company has experienced a concerning level of executive turnover since 2021. Ananym does not have an activist history yet, but knowing Charlie Penner and Alex Silver as we do, we would expect them to strive to work amicably with management to create value for shareholders. We do not expect that the firm will insist on a board seat for an Ananym principal. However, we do expect that Ananym will suggest several well-qualified industry executives who can help make the changes necessary to create significant shareholder value from a board level. But do not confuse the investor's friendly demeanor and amicable engagement for weakness. The firm is a fiduciary to its own investors and will do whatever is necessary to create value at its portfolio companies. The director nomination window does not open until Jan. 21, 2025, and we would expect that the parties will work out an agreement before then. Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More

Data center campuses power artificial intelligence and cloud computing
The campuses could grow so large that finding enough power and suitable land to accommodate them becomes increasingly difficult.
Renewable energy alone won’t be sufficient anytime soon to meet their power needs.
Natural gas will have to play a role, which will slow progress toward meeting carbon dioxide emissions targets.

An Amazon Web Services data center in Ashburn, Virginia, US, on Sunday, July 28, 2024.
Nathan Howard | Bloomberg | Getty Images

The power needs of artificial intelligence and cloud computing are growing so large that individual data center campuses could soon use more electricity than some cities, and even entire U.S. states, according to companies developing the facilities.
The electricity consumption of data centers has exploded along with their increasingly critical role in the economy in the past 10 years, housing servers that power the applications businesses and consumers rely on for daily tasks.

Now, with the advent of artificial intelligence, data centers are growing so large that finding enough power to drive them and enough suitable land to house them will become increasingly difficult, the developers say. The facilities could increasingly demand a gigawatt or more of power — one billion watts — or about twice the residential electricity consumption of the Pittsburgh area last year.
Technology companies are in a “race of a lifetime to global dominance” in artificial intelligence, said Ali Fenn, president of Lancium, a company that secures land and power for data centers in Texas. “It’s frankly about national security and economic security,” she said. “They’re going to keep spending” because there’s no more profitable place to deploy capital.
Renewable energy alone won’t be sufficient to meet their power needs. Natural gas will have to play a role, developers say, which will slow progress toward meeting carbon dioxide emissions targets.
(See here for which stocks are helping to fix the nation’s power grid.)
Regardless of where the power comes from, data centers are now at a scale where they have started “tapping out against the existing utility infrastructure,” said Nat Sahlstrom, chief energy officer at Tract, a Denver-based company that secures land, infrastructure and power resources for such facilities.

And “the funnel of available of land in this country that’s industrial zone land that can fit the data center use case — it’s becoming more and more constrained,” said Sahlstrom, who previously led Amazon’s energy, water and sustainability teams.
Beyond Virginia
As land and power grow more limited, data centers are expanding into new markets outside the long-established global hub in northern Virginia, Sahlstrom said. The electric grid that serves Virginia is facing looming reliability problems. Power demand is expected to surge, while supply is falling due to the retirement of coal- and some natural gas-powered plants.
Tract, for example, has assembled more than 23,000 acres of land for data center development across the U.S., with large holdings in Maricopa County, Arizona — home to Phoenix — and Storey County, Nevada, near Reno.
Tract recently bought almost 2,100 acres in Buckeye, Arizona with plans to develop the land into one of the largest data center campuses in the country. The privately-held company is working with utilities to secure up to 1.8 gigawatts of power for the site to support as many as 40 individual data centers.
For context, a data center campus with peak demand of one gigawatt is roughly equivalent to the average annual consumption of about 700,000 homes, or a city of around 1.8 million people, according to a CNBC analysis using data from the Department of Energy and Census Bureau.

A data center campus that size would use more power in one year than retail electric sales in Alaska, Rhode Island or Vermont, according to Department of Energy data.
A gigawatt-size data center campus running at even the lower end of peak demand is still roughly comparable to about 330,000 households, or a city of more than 800,000 people — about the population of San Francisco.
The average size of individual data centers operated by the major tech companies is currently around 40 megawatts, but a growing pipeline of campuses of 250 megawatts or more is coming, according to data from the Boston Consulting Group.
The U.S. is expected see a growing number of data center campuses of 500 megawatts or more, equivalent to half a gigawatt, in the 2030s through mid-2040s, according to the BCG data. Facilities of that size are comparable to about 350,000 homes, according to CNBC’s analysis.
“Certainly the average size of the data centers is increasing at a rapid pace from now to 2030,” said Vivian Lee, managing director and partner at BCG.

Community impact

Texas has become an increasingly attractive market due to a less burdensome regulatory environment and abundant energy resources that are more easily tailored to specific sites, Sahlstrom said. “Texas is probably the world’s best experiment lab to deploy your own power solution,” the energy officer said.
Houston-based Lancium set up shop in 2017 with the idea of bringing large electric loads closer to abundant renewable energy resources in west and central Texas, said Fenn, the company’s president. Originally focused on cryptocurrency mining, Lancium later shifted its focus to providing power for artificial intelligence with the advent of ChatGPT in late 2022.

Today, Lancium has five data center campuses in various stages of development. A 1,000-acre campus in Abilene is expected to open in the first quarter of 2025 with 250 megawatts of power that will ramp up to 1.2 gigawatts in 2026.
The minimum power requirement for Lancium’s data center customers is now a gigawatt, and future plans involve scaling them up to between three and five gigawatts, Fenn said.
For data centers that size, developers have to ensure that electricity costs in neighboring communities don’t rise as a consequence and that grid reliability is maintained, Fenn said. Pairing such facilities with new power generation is crucial, she said.
“The data centers have to partner with utilities, the system operators, the communities, to really establish that these things are assets to the grid and not liabilities to the grid,” Fenn said. “Nobody’s going to keep approving” such developments if they push up residential and commercial electric rates.

Renewables not enough

Data center campuses run by publicly-traded Equinix are rising to several hundred megawatts from 100- to 200 megawatts, said Jon Lin, general manager for data center services at the company. Equinix is one of the largest data center operators in the world with 260 facilities spread across 72 metropolitan areas in the U.S. and abroad.
Developers prefer carbon-free renewable energy, but they also see solar and wind alone as unable to meet current demand due to their reliance on changing weather conditions.
Some of the most critical workloads for the world’s economy, such as financial exchanges, run at data centers operated by Equinix, Lin said. Equinix’s data centers are online more than 99% of the time and outages are out of the question, the executive said.
“The firmness of the power is still incredibly important for these data centers, and so doing that solely off of local renewables is candidly just not an option,” Lin said.
The major technology companies are some of the largest purchasers of renewable power in the U.S., but they are increasingly turning to nuclear in search of more reliable sources of electricity. Microsoft is supporting the restart of the Three Mile Island nuclear plant outside Harrisburg, Pennsylvania through a power purchase agreement. Amazon and Alphabet’s Google are investing in small nuclear reactors.

But building new nuclear reactors is expensive and fraught with delays. Two new reactors in Georgia recently came online years behind schedule and billions of dollars over budget.
In the short run, natural gas will fuel much of the power demanded by data centers, Lancium’s Fenn said. Gas is the main, short-term power source providing the reliability these facilities require, Boston Consulting Group’s Lee said.
Investments could be made in new gas generation that adds carbon capture and battery storage technology over time to mitigate the environmental impact, Lee said.
The industry hopes that gas demand will taper off as renewables expand, battery storage costs come down and AI helps data centers operate more efficiently, Fenn said. But in the near term, there’s no question that data center expansion is disrupting technology companies’ emissions targets, she said.
“Hopefully, it’s a short term side step,” Fenn said of stepped-up natural gas usage. “What I’m seeing amongst our data center partners, our hyperscale conversations, is we cannot let this have an adverse effect on the environmental goals.”
Note: CNBC analysis assumes a data center campus is continuously utilizing 85% of its peak demand of a gigawatt throughout the year, for a total consumption of 7.4 billion kilowatt-hours. Analysis uses national averages for household electricity consumption from EIA and household size from Census Bureau. More

The Biden administration’s new student loan repayment plan is tied up in legal battles. The result: millions of borrowers have had their monthly payments put on hold.
“Borrowers are frustrated about the delay toward forgiveness,” said higher education expert Mark Kantrowitz. “They feel like they’ve been waiting for Godot.”

Matthias Ritzmann | The Image Bank | Getty Images

With the Biden administration’s new student loan repayment plan is tied up in legal battles, millions of borrowers have had their monthly payments put on hold.
The break from the bills is likely a relief to the many federal student loan borrowers enrolled in the Saving on a Valuable Education plan, known as SAVE. But it may also be causing them anxiety over the fact that they won’t get credit on their timeline to debt forgiveness.

For example, those also enrolled in the Public Service Loan Forgiveness program, who are entitled to loan cancellation after 10 years, have seen their journey toward that relief halted during the forbearance.
“Borrowers are frustrated about the delay toward forgiveness,” said higher education expert Mark Kantrowitz. “They feel like they’ve been waiting for Godot.”
Here’s what borrowers enrolled in SAVE should know about the delay to debt cancellation.

Delay could stretch on for months

In October, the U.S. Department of Education said that roughly 8 million federal student loan borrowers will remain in an interest-free forbearance while the courts decide the fate of the SAVE plan.
A federal court issued an injunction earlier this year preventing the Education Department from implementing parts of the SAVE plan, which the Biden administration had described as the most affordable repayment plan in history. Under SAVE’s terms, many people expected to see their monthly bills cut in half. 

The forbearance is supposed to help borrowers who were counting on those lower monthly bills. But unlike the Covid-era pause on federal student loan payments, this forbearance does not bring borrowers closer to debt forgiveness under an income-driven repayment plan or Public Service Loan Forgiveness.
Adding to borrowers’ annoyance is that “those enrolled in the SAVE Plan were not given the choice of forbearance,” said Elaine Rubin, director of corporate communications at Edvisors, which helps students navigate college costs and borrowing. If borrowers want to stay in SAVE, they can’t opt out of this pause.
Borrowers enrolled in PSLF are especially concerned, Kantrowitz said. That program requires borrowers to work in public service while they’re repaying their student loans.
“They have been working in a qualifying job, but aren’t making progress toward forgiveness,” he said. “Some borrowers are working a job they hate, but are sticking with it in the expectation of qualifying for forgiveness. Others are close to retirement and don’t want to have to work past their normal retirement age just to get the forgiveness.”

What borrowers can do

Despite the delay toward forgiveness, there are still a few good reasons for borrowers to stay enrolled in SAVE, experts say. During the forbearance, borrowers are excused from payments and interest on their debt does not accrue.
Keep in mind: Even if you make payments under SAVE during the forbearance, your loan servicer will just apply that money toward future payments owed once the pause ends, the Education Department says.
If you’re eager to be back on your way to debt cancellation, you have options.
You may be able switch into another income-driven repayment plan that is still available. Under that new plan, you may have to start making payments again. Yet if you earn under around $20,000 as a single person, your monthly payment could still be $0, and therefore you might not lose anything by switching, Kantrowitz said.
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Changing plans might be especially appealing to those who are very close to crossing the finish line to debt forgiveness and just want to see their balance wiped away, experts said. (You’ll likely be placed in a processing forbearance for a period while your loan servicer makes that switch. During that time, you will get credit toward forgiveness.)
The Education Department is also offering those who’ve been working in public service for 10 years the chance to “buy back” certain months in their payment history. This allows borrowers to make payments to cover previous months for which they didn’t get credit. But to be eligible for the option, the purchased months need to bring you to the 120 payments required for loan forgiveness.
“The buyback option might be eliminated under the Trump administration,” Kantrowitz said. “So, if you want to use it, you should use it now.” More