Power Behind the Chips
Ian Kar@iankar_
−1.8%
since Oct 2
The idea
I believe power and grid capacity are becoming as scarce and valuable as the chips driving AI, since electricity demand is outrunning what the grid can deliver. To play this, I own grid equipment makers and builders with long backlogs, merchant and nuclear power producers, datacenter electrical suppliers, regulated utilities as ballast, and a small sleeve of next-gen nuclear for extra upside, with some cash held back. I'm thinking in a multi-year window here, not a quick trade, and I'd rethink the idea if the grid buildout timeline or demand growth clearly stalls.
What it owns
- Transformers, switchgear, and transmission hardware have multi-year backlogs because the grid cannot be rebuilt without them. · Eaton CorporationIt sells the switchgear, breakers, and power distribution equipment that every grid upgrade and datacenter requires, with growing backlogs and firm pricing., GE VernovaIt makes gas turbines and grid hardware that utilities buy when power demand increases, with turbine order slots staying sold out years in advance., Quanta ServicesIt is the largest contractor that strings transmission lines and builds substations, with a multi-year backlog that reflects strong demand for grid infrastructure., Hubbell IncorporatedIt makes the connectors, enclosures, and utility components that go into every mile of new transmission wire as utilities increase grid spending., MYR GroupIt is a smaller electrical contractor doing transmission and substation work and moves faster on the same infrastructure buildout trend as larger competitors.30%
- Generators selling into a market where datacenter demand is outrunning new supply are paid more for every unit of electricity produced. · Constellation EnergyIt owns the largest US nuclear fleet and benefits when large power buyers sign long-term contracts for clean firm electricity at premium prices., Vistra CorpIt sells electricity at market prices and benefits directly when electricity becomes scarcer and wholesale power prices remain elevated or climb higher., NRG EnergyIt sells electricity where demand is growing fastest in Texas and is adding generation capacity to meet rising demand from datacenters and electrification., Talen EnergyIt struck one of the first major contracts to sell nuclear power directly to a datacenter and benefits as more of these dedicated power agreements are signed.23%
- Every new datacenter requires power management and cooling equipment regardless of which company wins in artificial intelligence. · Vertiv HoldingsIt builds the power and cooling systems inside datacenters and experiences direct exposure to datacenter construction budgets and artificial intelligence spending., nVent ElectricIt makes the enclosures and liquid cooling components that denser artificial intelligence racks require as power consumption per rack increases., Modine ManufacturingIt pivoted into datacenter cooling equipment and benefits when its datacenter cooling orders continue to grow at a faster pace.15%
- Large regulated utilities grow steadily with electrification and reduce volatility in the basket. · NextEra EnergyIt is the largest builder of renewable generation and grid infrastructure and provides stability through a growing backlog of new projects., Southern CompanyIt runs the only new large nuclear reactors built in the US in recent decades and serves fast-growing Southeast demand when regulators approve infrastructure spending., Duke EnergyIt is a regulated utility raising grid spending plans to meet datacenter demand in the Carolinas and benefits when regulators approve larger capital plans.13%
- Small bets on new nuclear capacity represent a potential long-term solution if electricity scarcity persists over the next decade. · BWX TechnologiesIt makes reactor components for the Navy and new nuclear projects, earning revenue today while providing exposure to expanding nuclear orders from government and commercial buyers., Oklo IncIt is developing small reactors to power datacenters directly and requires regulatory approvals and signed customer agreements to advance its business., NuScale PowerIt has the only small modular reactor design approved by US regulators and succeeds if power scarcity drives buyers toward new nuclear capacity this decade.9%
- Cash10%