AI Buildout Shovels
Carlos Marcial@carlosmarcialt
−6.8%
since Oct 6
The idea
I think the AI data center buildout keeps running hot for the next few years, so I own the companies supplying it rather than the AI names themselves. The basket spreads across power and grid equipment, the contractors doing the physical building, cooling systems, the metals going into all of it, and the landlords and services keeping sites running, with a mid-cap tilt to match a near-term window. I keep 10% in cash to add on dips, and I would rethink this if the buildout timeline itself starts slipping.
What it owns
- Data centers need more electricity than the grid can easily supply, so the companies making transformers, switchgear and power distribution are the buildout's tightest bottleneck. · Eaton CorporationIt sells the switchgear, breakers, and power distribution that every new data center needs before turning on, making its data center orders a key indicator for the take., GE VernovaIt makes the gas turbines and grid equipment that get new power onto the grid, and power is the tightest constraint on the whole buildout., Vistra CorpIt owns the power plants, including nuclear, that data center operators are signing long contracts with to serve rising electricity demand., Hubbell IncorporatedIt sells the connectors, enclosures, and utility components that go into grid upgrades, earning from the same power bottleneck the take is built on., nVent ElectricIt makes the enclosures and electrical protection gear that house data center power systems, a smaller way to own the same electrical spend.28%
- Someone has to actually construct and wire these buildings, and the big electrical and construction contractors have record order books from it. · Quanta ServicesIt builds the transmission lines and substations that connect new data centers to power, so its backlog is a direct reading on whether the buildout is still running hot., EMCOR GroupIt does the electrical and mechanical work inside data centers, the crews pulling the wire and installing the systems., Comfort Systems USAIt installs the mechanical and cooling systems inside data centers and has become one of the purest contractor plays on the buildout., MasTecIt builds power delivery and communications infrastructure, the heavy outdoor work that has to happen before data centers can run., Sterling InfrastructureIt does the site preparation and ground work before concrete gets poured, with data centers becoming its biggest driver.25%
- AI chips run hot, and every new data center needs serious cooling gear before it can open. · Vertiv HoldingsIt is the biggest pure supplier of cooling and power management inside data centers, as direct a shovel as this take has., Modine ManufacturingIt is a smaller company riding the move to liquid cooling for hot AI chips, the mid-cap side of the cooling bet., Johnson ControlsIt supplies the HVAC and building controls that keep data centers running, a larger-cap way to own the cooling layer.15%
- Every data center and grid upgrade consumes huge amounts of copper and steel, the industrial metals layer of the buildout. · Freeport-McMoRanIt is the biggest US-listed copper miner, and every data center, transmission line, and transformer in this buildout is full of copper., Southern CopperIt is close to a pure bet on the copper price itself, the rawest version of the industrial metals idea in this take., NucorIt supplies the structural steel going into data center shells and the towers carrying new power lines across the grid.12%
- The companies that own the data centers and keep the facilities serviced and clean collect rent on the whole trend. · Digital Realty TrustIt owns and leases the data centers themselves, collecting rent that rises when capacity is scarce., ABM IndustriesIt cleans and services large facilities including data centers, the services angle on the buildout., Iron MountainIt is converting its storage business cash into a fast-growing data center arm that expands as a share of the company.10%
- Cash10%