The Ongoing Big Data Big Power Growth Trade Will Continue

I want to impart what I know in these halls before I have to rip these halls down. We are all familiar with datacenters and $NVDA and the imposition they place on utilities. But the small details are what’s really interesting, such as the latest PJM auction clearing 450MW per day, a price for power never thought possible. All of this because 25% of Virginia’s power is consumed by Hyperscalers in N. Virginia.

What is a hyperscaler? A very large datacenter at scale: $GOOGL $AMZN, $MSFT, $META, $ORCL

Due to this insane demand, the power generation industry is in flux, which is making nuclear energy look real good and causing spot uranium to spike. Companies like $CEG are converting coal to gas and there is a lot of talk about converting those old coal plants to nuclear, because it’ll save builders 30%.

Nuclear/Uranium plays: $SMR, OKLO, $BWXT $CCJ $UUUU $UEC $LEU $DNN
Within this construction world, there are several key players: $ACM $FLR $J $BMI, $GEV, $EME

Since the demand for this power is almost entirely coming from data centers and hyperscalers, it’s worth looking into what makes a datacenter.

ELECTRICAL: $ETN $VRT $HUBB $NVT $ENS $POWL
GENERATORS: $CMI $CAT
CHILLERS (COOLING): $VRT $SMCI $JCI $TT $CARR $SPXC
NETWORKING: $ANET $CSCO $ALAB $BDC $CRDO
CHIPS: $MRVL $NVDA $AMD $AVGO $ARM $QCOM $MU $INTC $MPWR $GFS $TSM
RETIMERS FOR GPUs: $ALAB $MRVL $AVGO $CRDO $DIOD
SERVERS: $DELL $SMCI $IBM $ORCL $HPE
Smallers Datacenters: $DOCN, $AMT $IRM $DLR $EQIX $DBRG
SWITCHES: $CSCO $ANET $JNPR $DELL $CIEN
OPTICAL AND LASERS: $COHR $GLW $CIEN $MKSI $LITE $CCOI $IPGP
ACTIVE COPPER CABLES (AEC): $CRDO $TEL $APH $BELFB

I might have missed a few areas, but you get the gist. There is a daisy chain of companies benefitting from this explosion of BIG DATA and by all accounts, we are in the opening salvo of the growth cycle. There are ~500 hyperscale centers in America, 1,000 globally, and we are building 150 to 200 more every year. The CEO of $ETN said 95% of his business is dealing with 200g and 400g datacenters and that all of the AI business is in the future. Once the 800g datacenters come online, you will begin to see even higher demand for power and in turn more facilities to accommodate all of the companies deploying AI applications.

If you’re investing and like growth, there really isn’t a better or more relevant area of the market than this. Naturally, prices might fluctuate with valuations but the overall story is here to stay for many years to come.