How I’ll Play The Data Center Boom

NVIDIA’s latest earnings report reminding me that the Data Center Boom still isn’t over. Each time I think it’ll slow down, it appears to only get larger. This has me thinking about the immense resources required to power these data centers from the raw energy to the future buildings, server racks, and massive buildings that we’ll need to get up and running around the country in the next 3-5 yeras.

Here are some eye-opening stats that’ll better illustrate what I mean:

• The Boom: NVIDIA’s report revealed that cloud service providers are now accounting for half of their Data Center sales, which in-fact they are in a race to integrate NVIDIA’s AI hardware.
• Energy Demand: Data centers consumed ~460 TWh of electricity in 2022 (~1.5% of global use). This should double to over 1,000 TWh by 2026. Do we even have the power capabilities for this yet? These are massive questions.
• AI’s Impact: AI-driven growth could increase data center power demands by 160% in just the next 5 years, potentially consuming 3-4% of global electricity.

For the investors out there, a few things must come to mind: data center stocks, data center REITs, utility companies managing the power supplies and flipping the switches.

I’ll be watching all of this closely and will share an update when I can. Most importantly, I am a bit late to this trend, so I won’t be chasing anything. However, it does surely open up an entirely new market for investing possibilities. Here’s a helpful image from an old AI post I wrote on my blog:

Written by Stefan Cheplick, a fintech builder and writer with experience at Stocktwits and TradingView. Background and published work.