Take A Look At AI Data Centers

What is the trend that will power AI stocks through the rest of 2025?

AI data center stocks and the acceleration of it.

A great deal has been promised by AI, and none of this can happen without the data capacity.

The build-out has been nothing short of breathtaking, with billions upon billions being thrown at the scaling up of data centers.

AI workloads, particularly those involving generative AI and large language models, require significant computational power, which translates to massive electricity consumption.

Training a single large language model can consume as much energy as 1,000 U.S. households annually.

Estimates show that global data center power demand will increase by 50% by 2027 and up to 165% by 2030, with AI accounting for a growing share (14% of current demand, expected to rise significantly).

This demand surge is already straining power grids, creating a bottleneck that power tech companies are uniquely positioned to address.

Major tech companies—Microsoft, Amazon, Alphabet, and Meta—are investing heavily in AI infrastructure, with capital expenditures projected to range between $385 billion and $598 billion in 2025 alone.

These hyperscalers are building and expanding data centers to support cloud computing and AI workloads, requiring not only computing hardware but also robust power infrastructure.

For instance, Microsoft operates over 300 data centers globally, and Amazon’s CEO Andy Jassy has cited power availability as the single biggest constraint on data center expansion.

Companies supplying infrastructure for data centers—such as Vertiv (power and cooling solutions) and Eaton (power management systems)—are seeing robust demand. Vertiv’s backlog grew 10% in Q1 2025, with management raising revenue growth forecasts to 18%.

Eaton’s advanced electrical systems are critical for AI infrastructure, contributing to its bullish outlook. These firms benefit from the need for uninterrupted power and efficient cooling, driven by densely packed servers in AI data centers. Liquid cooling, in particular, is a fast-growing market, with Vertiv projecting 24% annual growth through 2026.

Many power tech stocks remain undervalued relative to their growth potential. Morningstar notes that utilities were 5% undervalued as of May 2024, with AI-driven demand not yet fully priced in. This creates an attractive entry point for investors.

The AI data center boom is a powerful catalyst for power tech stocks in 2026, driven by surging electricity demand, hyperscaler investments, clean energy mandates, and undervalued opportunities.

In the short-term, tech has gone full steam ahead, betting that this data center boom will overflow into a revenue-generating software narrative.

I am still not seeing it, and there have been some whispers that perhaps big tech is overspending on the data centers.

This has caused the pace of price action to slow down in the short-term, and many firms have relied on buybacks to boost their stock prices in the short-term.

We are inching closer and closer to a day of reckoning where AI will need to sink or swim.

That day isn’t here yet, but AI needs to do a lot of work to convince the incremental tech company to spend big on their services.

In the meantime, the top AI and data center stocks will do moderately well for the rest of the year.