The Whole AI Buildout
Eduardo Teixeira@eduardot134
The idea
I think spending on AI data centers keeps surprising to the upside, so I'd rather own the whole supply chain than bet on one winner. The portfolio spans chips and memory, the tools that make those chips, networking, data center buildings and cooling, and the power and grid gear behind it all, weighted toward the big established names with smaller stakes in faster growers. I'm keeping some cash on the side to add if prices drop, and I'm treating this as a multi-year position rather than something to trade around.
What it owns
- Every AI data center starts with processors and memory, and these companies design or build most of them. · NVIDIA CorporationIt sells most of the chips that AI data centers are built around, so its revenue rises as cloud spending keeps beating forecasts., Taiwan Semiconductor ManufacturingIt makes the advanced chips for NVIDIA, AMD, Broadcom and custom AI chips, so it gets paid whichever chip designer wins., Broadcom Inc.It designs custom AI chips for the biggest cloud companies and sells networking chips that link servers, so it gains when those companies build their own chips instead of buying from rivals., Micron TechnologyIt makes fast memory stacked next to AI chips, and only three companies produce it at scale in the newest AI systems., Advanced Micro DevicesIt is the main alternative to NVIDIA for AI chips, so it picks up spending from buyers who want a second supplier.33%
- Electricity is turning into the main limit on how fast new data centers can open. · Eaton CorporationIt makes the switchgear, transformers and power distribution equipment that every data center needs to run electricity safely., GE VernovaIt builds gas turbines and grid equipment, and AI data centers need huge amounts of new power supplied years in advance., Quanta ServicesIt is the contractor that actually builds power lines, substations and grid connections for utilities and data centers., Constellation EnergyIt runs the largest fleet of nuclear plants in the US and sells steady, carbon-free power that tech companies want for data centers.20%
- AI chips run hot and need buildings, power gear and cooling built specifically for them. · Vertiv HoldingsIt sells the cooling and power gear that goes inside data centers, and AI chips run hot enough to need much more of it., Equinix Inc.It owns data centers around the world and rents space to companies that need to connect to cloud and AI services, so rents rise as demand grows., Digital Realty TrustIt owns large data centers that the biggest cloud and AI companies lease for whole buildings at a time.14%
- Thousands of AI chips have to talk to each other at high speed, which takes switches, fiber and optical parts. · Arista NetworksIt sells the high-speed switches that connect thousands of AI servers into one cluster, and the big cloud companies are its main buyers., Coherent Corp.It makes the optical parts that turn electrical signals into light inside AI clusters, and every new cluster needs a lot of them., Ciena CorporationIt makes the optical equipment that carries data between data centers, which matters more as AI training spreads across multiple sites., Credo TechnologyIt makes the high-speed copper cables and chips that wire AI servers together over short distances in growing volumes.14%
- More chips means more of the machines that make them, and only a few companies build those machines. · ASML HoldingIt is the only company that makes the machines needed to print the most advanced chips, so more AI chip factories means more orders for it., Lam ResearchIt sells the equipment that builds memory chips and advanced chip packaging, both of which AI is pushing hard.9%
- Cash10%