Beyond the obvious high-tech AI behemoths, there will be a number of other firms who could enjoy benefits from this coming revolution. The massive amounts of electricity required to run the enormous data centers that host AI could lead to unexpected gains for some well-positioned power generation firms.
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Here are a few to consider:
¤ Dominion Energy (D): Dominion Energy serves Northern Virginia, which represents almost 35% of the global data center capacity. Home to all major cloud providers, the area enjoys ever-growing demand for data-center space, which rose 20% in 2023 alone.
¤ Pacific Gas & Electric Company (PCG): Besides Virginia, the largest data center market in the U.S. has traditionally been the San Francisco Bay area, which PG&E supplies with power.
¤ Constellation Energy Corporation (CEG) and NRG Energy (NRG): Some of the fastest-growing data center locations are in Texas, primarily Dallas, Houston, and Austin. The Lone Star State is drawing local subsidiaries of large producers, such as Constellation Energy Texas, a part of Constellation Energy Corporation, and Reliant Energy, owned by NRG Energy.
¤ Southern Company (SO): Another prime data center market is Atlanta, Georgia. The Southern Company is one of the largest producers of electricity in the country, and expects demand for power from its customers to surge 17-fold through 2030.
¤ Pinnacle West Capital (PNW): A data center build-out is also well under way in Phoenix, Arizona, thanks to its proximity to major West Coast cities and the low risk of natural disasters. The area is serviced by the Arizona Public Services Company, a subsidiary of Pinnacle West Capital (PNW).
Conclusion: Powering the Revolution
The obvious winners of the AI revolution are those companies that are working feverishly to develop increasingly advanced technologies. However, investors could find value from those energy generation companies who are fueling the data centers that are powering the AI revolution.
For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.
