Why Texas Pacific Land Corporation Rallied Over 50% in the First Half of 2026

Shares of Texas Pacific Land Corporation (TPL +1.80%) rallied 52.4% in the first half of 2026, according to data from S&P Global Market Intelligence.

Texas Pacific owns a large land portfolio and oil and gas royalty interests in West Texas, a center for both U.S. oil and gas development, as well as the AI data center build-out. Therefore, the first half of 2026 provided a somewhat ideal environment for the company to thrive.

War with Iran and the agentic AI boom spell growth for Texas Pacific

One of the big factors in Texas Pacific’s first half story was, obviously, the war in Iran and the subsequent rise in oil and gas prices. TPL’s portfolio of 882,000 surface acres and 224,000 NRA (net royalty acres) near the Permian Basin positions it to benefit from higher prices. Higher oil and gas prices not only spur oil and gas companies to explore, lease, and drill on more land, but they also increase TPL’s royalties, given that most royalties are based on a percentage of sales, and therefore rise along with prices.

Not only that, but West Texas is also becoming a prime location for AI data centers, thanks to its cheap land, lower regulatory burden, and access to abundant energy. AI data centers also require a lot of water, and TPL is also a major water producer, owning not only the groundwater on its land but also a water treatment facility in the state as well.

These capabilities led to a large AI data center partnership with Bolt, an AI data center start-up helmed by former Alphabet CEO Eric Schmidt. Bolt has ambitions to build 10 gigawatts of AI computing data centers in Texas. TPL invested $50 million in Bolt in December, and under the terms of the deal, may take even more of a stake in in Bolt in exchange for its surface acres, while also receiving a right of first refusal to provide Bolt with power and water to its future data centers. Although TPL’s direct $50 million investment in Bolt occurred in late December, more details about the deal emerged during the company’s fourth-quarter earnings call in February.

After a February surge, Texas Pacific’s stock took a bit of a downturn in March and April as oil prices fell from their highs, as a tentative ceasefire was agreed to on April 7. Furthermore, the stock came under renewed pressure following the unexpected death of the CEO of Horizon Kinetics Holdings (HKHC +2.60%), which is Texas Pacific’s largest shareholder. The unexpected death triggered a sell-off, as investors pondered whether Horizon would sell its stake should new management seek to wind down the company’s holdings.

However, there was more good news toward the end of June for TPL, when the company announced a deal with Chevron (CVX +1.35%), which is building a power generation plant on TPL land to support a customer’s data center in Reeves County, Texas. TPL will supply land and brackish water for the project.

Image source: Getty Images.

Texas Pacific is well-positioned for the AI boom, but priced accordingly

Texas Pacific is in a very fortunate position, owning a massive amount of land and oil and gas royalty rights in an oil and gas-rich region, which is also becoming “ground zero” for the AI data center build-out.

After the first half run, TPL shares look a bit expensive at 55 times trailing earnings and roughly 38 times this year’s earnings estimates; however, keep in mind that, as a royalty company, Texas Pacific is relatively asset-light, with strong growth prospects thanks to the continued AI-related development of West Texas. As such, it’s a strong addition to any stock portfolio aiming to capitalize on the AI boom and U.S. energy security.