−5.3%
since Oct 6
The idea
I believe AI data centers are outrunning the grid's ability to deliver power, and the real bottleneck is physical: transformers, switchgear, high-voltage lines, and the crews to install them, all with multi-year backlogs. This basket owns that chokepoint from both ends, weighting equipment makers and grid builders working through the backlog now, balanced with steadier power sellers, metals, and broad grid exposure built to compound over a decade.
What it owns
- These companies make the electrical equipment that converts and distributes power across the grid and into data centers, and lead times are stretched by surging demand. · GE VernovaIt manufactures transformers and high-voltage equipment for the grid, with order backlogs and lead times stretched by electrification demand., Eaton CorporationIt supplies electrical equipment connecting the grid to data centers, with order books running ahead of capacity and pricing power intact., Hubbell IncorporatedIt manufactures connectors, enclosures, and utility components consumed in bulk by every grid upgrade and electrification project., Powell IndustriesIt builds custom switchgear for data-center and industrial power projects, with a backlog swollen by electrification demand and offering outsized swings.29%
- These contractors and distributors earn on the labor and materials side of transmission and substation construction, with backlogs swollen by utility spending. · Quanta ServicesIt is the largest contractor building transmission lines and substations, earning on the labor side of grid expansion as backlogs climb., Wesco InternationalIt distributes electrical equipment and wire to utilities and contractors, earning a cut on nearly every grid and data-center project., MYR GroupIt is a specialist contractor for transmission and substation work, smaller than peers and offering more upside per dollar of new grid spending.17%
- These companies install and supply the power conditioning, cooling, and electrical systems inside AI data centers, tracking hyperscaler capital spending closely. · Vertiv HoldingsIt builds power and cooling equipment inside data centers, tracking hyperscaler capital spending closely and showing slowdowns first., Comfort Systems USAIt installs mechanical and electrical systems inside data centers and chip plants, with backlogs that signal whether big tech projects keep arriving faster than crews can staff them., nVent ElectricIt makes enclosures, cooling, and electrical hardware for data centers and grid projects, holding up as long as both segments keep posting strong order growth.14%
- These power generators own nuclear and other generation in tight markets where rising electricity prices flow to owners, especially those signing long-term data-center deals. · Vistra CorpIt owns generation including nuclear in markets where power is scarce, so rising electricity prices flow to it as data-center demand tightens supply., Constellation EnergyIt operates the country's largest nuclear fleet, selling always-on carbon-free power to data centers signing long-term contracts at premium prices.12%
- These holdings spread the grid investment bet across established infrastructure players and a utility serving the data-center heartland, providing stability if individual companies stumble. · First Trust Smart Grid Infrastructure ETFIt holds dozens of infrastructure and grid companies, diversifying the same buildout bet and surviving only if the grid investment cycle holds., Dominion EnergyIt serves northern Virginia, the densest data-center market, so its growth plan is practically a bet on the grid expansion and data-center theme.10%
- These copper miners supply the metal wound through every transformer, transmission line, and data-center system in the electrification buildout. · Freeport-McMoRanIt is one of the world's largest copper producers, supplying the metal wound through transformers, transmission lines, and data-center systems., Southern CopperIt is a low-cost copper miner that stays profitable through price wobbles while electrification demand for copper climbs steadily.10%
- Cash8%