Got $5,000? 2 Stocks Supplying the AI Data Center Power Crunch.
2026-10-14 21:05
•John Ballard •The Motley Fool
••••• •• Axe Cap view
AI Data Center Boom Shapes Power Stocks
Vistra and GE Vernova stand to benefit from soaring data center electricity demand.
Data centers are the backbone of AI development, and their thirst for power is growing fast—around 24% per year until 2030. Vistra, despite a recent share price drop of 19%, posted over 30% profit growth last year, making its shares look undervalued given the strong fundamentals. GE Vernova, with a backlog nearing $200 billion and doubling data center orders, is another clear winner. Both companies carry hefty valuations, reflecting robust earnings growth expectations north of 30% annually. For South African investors, we must keep an eye on USD/ZAR as the rand’s strength or weakness will affect returns on these dollar-denominated assets. The risk? Execution challenges at GE Vernova and potential lower-than-expected data center expansions could hurt forecasts. Still, with AI becoming central to global tech, the long-term trend is compelling. this is just our opinion and not financial advice
Prefer buying Vistra for its recent price weakness and stable profit growth. Watch GE Vernova closely but be mindful of operational risks. Hedge with USD/ZAR exposure management.
- VST
- GEV
- USD/ZAR
- Execution risks undermining GE Vernova’s backlog conversion
- Potential slowdown in data center expansion hurting demand estimates
6/10
With data center electricity demand projected to grow 24% annually through 2030, Vistra and GE Vernova are positioned to capitalize on the power supply gap. Vistra's adjusted operating profit grew over 30% year-over-year despite a 19% stock decline, while GE Vernova boasts a $176 billion backlog with data center orders more than doubling. Both stocks trade at high valuations but analysts project robust earnings growth of 34-36% annually.
Our take is based on reporting first published by The Motley Fool.