Investors are parsing every detail of Nvidia’s earnings report to track the AI infrastructure boom.
Chip stocks have been ground zero for the massive sums going into data centers to run AI applications, with rows of server racks powered by various types of semiconductors.
Nvidia has been the poster child of this AI bull market and one of the biggest winners of capex spending by AI hyperscalers. That has sent Nvidia’s market value to over $5 trillion.
But while investors focus on the companies currently in the spotlight, they risk missing out on the next leaders set to receive a boost from AI spending. That’s what I discussed in detail last night at my AI Retirement Reset briefing. If you missed it, check out the replay here.
Massive sums of money keep pouring into data centers, with hyperscalers lining up $2.6 trillion in future spending.
And that will drive a new AI bottleneck and set in motion a wave of capital into the companies that stand to profit…
Money is leaving the AI giants inside millions of retirement accounts. And now, Larry Benedict says more than $1 trillion could move into a much smaller market, with one overlooked ticker in its path. Get the ticker, for free, before September 16. Watch the briefing now.
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According to data from Cleanview, there are 1,290 data centers operating in the U.S. that can consume 61 gigawatts of electricity.
An additional 2,019 planned data centers will add another 377 gigawatts of electricity demand – a 618% jump in power needs.
The chart below shows planned data center expansions by state compared to those currently in operation.
Source: Apollo
Certain states like Texas, Virginia, and Utah are seeing the largest concentrations of planned additions. And the strain on the power grid will be enormous.
Data centers currently consume around 6% of the nation’s electricity. That figure jumps to 12% by 2030 and could rise to 20% within the next 10 years.
For all the excitement around semiconductor companies and other advanced technology surrounding AI, the new bottleneck is far more fundamental.
Simply meeting the power needs for current and future data center demand is emerging as a crunch point for enabling AI applications.
That’s why the new winners of the data center buildout are companies found operating inside the AI power stack.
The explosive growth of AI is reshaping not only technology but the entire U.S. energy system. The data centers that train and run AI models need steady, reliable power on a scale we’ve never seen.
Unlike traditional computing loads, AI facilities operate around the clock with minimal tolerance for interruption. In order to meet that high run time, there are critical points in the AI power stack’s supply chain.
That includes companies that produce energy for power plants to turn into electricity, where natural gas will play a major role in meeting data center demand.
But you also need to transport gas to where it’s consumed, which makes midstream energy companies essential in the power stack. Midstream companies operate pipelines along with processing and storage facilities for energy products.
Given the strains already present on public power grids, hyperscalers are also turning to independent power producers, which own power plants running on gas and nuclear.
And speaking of nuclear, the industry is seeing a resurgence given its carbon-free, always-on electricity that’s well suited for meeting data center uptime demand.
Semiconductor stocks have seen a massive profit tailwind from data center capex. Energy companies operating in the AI power stack are next in line.
That’s why, if you didn’t tune in to my AI Retirement Reset event last night, I’d encourage you to give it a look. I shared the name of a top ticker that I believe is going to benefit from the trillions about to flow into energy production. And that ticker is just the start.
The replay will only be up for a short time, so watch it here now.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
