Powering the AI Buildout
Jaime Schuster@jsm02
The idea
I believe the US grid can't keep up with AI power demand, and gas plus nuclear close that gap over the next three to five years. This basket owns the plant operators already signing long-term power deals with tech companies, the equipment makers whose turbines and grid gear are sold out years ahead, and the gas and uranium suppliers that feed it all. A small slice sits in early small-reactor developers for upside if they break ground, kept smaller since they trade on news more than near-term power sold. I'd rethink this if AI companies start pulling back on data center spending.
What it owns
- Data centers are signing long-term contracts to buy electricity from nuclear and gas power plants, creating steady revenue for the operators that own them. · Constellation EnergyIt operates the largest US nuclear fleet and is signing long-term power contracts with data center companies, directly capturing the demand this take centers on., Vistra CorpIt owns both nuclear and gas power plants and is pursuing upgrade projects while landing data center power contracts, covering both the nuclear and gas halves of the take., NRG EnergyIt is building new gas power plants to meet rising demand and is signing contracts to supply electricity to data center operators., Talen EnergyIt sells electricity from its existing nuclear and gas plants directly to data center customers under long-term contracts.27%
- New power plants and data centers cannot connect to the grid without turbines, transformers, switchgear and distribution equipment that suppliers are booked years ahead to deliver. · GE VernovaIt makes the gas turbines that new US power plants need and is developing small reactors, with a large backlog of orders waiting to be filled., Eaton CorporationIt makes the electrical equipment like switchgear and distribution gear that connects data centers and power plants to the grid., Quanta ServicesIt builds the power lines, substations and grid connections that new plants and data centers need to deliver power, and those projects are multiplying., Hubbell IncIt makes the smaller electrical components utilities buy when they add grid capacity to connect new plants and data centers.25%
- Natural gas will fuel most new data center power plants over the next several years, so the pipelines and producers that deliver it capture that demand. · Williams CompaniesIt operates major gas pipelines including the main East Coast line, and new gas plants built for data centers depend on that pipeline capacity., EQT CorporationIt is the largest US natural gas producer, supplying the fuel for the gas plants that will power new data center demand., Kinder MorganIt operates the largest US gas pipeline network, so growth in gas burned for power plants flows directly through its system.17%
- Every operating reactor needs uranium, enriched fuel and specialized components from a limited set of suppliers, and demand rises as plants run longer and new ones start up. · Cameco CorporationIt is one of the world's largest uranium miners and part-owns a reactor maker, so every reactor that operates or gets built requires what it produces., BWX TechnologiesIt makes reactor components and nuclear fuel, and commercial nuclear work is expanding as demand for reactor power grows., Centrus EnergyIt enriches uranium into reactor fuel and is one of the few US companies doing so, which matters as the country reduces reliance on Russian fuel.16%
- Small reactor developers could win substantially if their first commercial plants reach operation, making them a smaller deliberate position in the take. · Oklo IncIt is designing small reactors intended to power data centers directly, and progress toward federal approval and a first plant would validate the bet., NuScale PowerIt has already secured federal approval for its small reactor design and is waiting for a customer commitment to build one.8%
- Cash7%