Morgan Stanley Says AI Data Centers Face a 38-Gigawatt Power Gap. These Industrial Stocks Fill It.
AI's biggest bottleneck could be an industrial opportunity.
Overview
Morgan Stanley (NYSE: MS) estimates that U.S. data centers will need roughly 68 gigawatts of power between 2026 and 2028. About 15 gigawatts are tied to projects already under construction, while another 15 gigawatts can be supplied through available or contracted grid capacity. Do the math, and you're left with a potential 38-gigawatt power gap. That's not trivial.
In some parts of the country, getting a new connection to the electrical grid can now take five to seven years. Artificial intelligence (AI) companies won't wait that long, and Morgan Stanley expects data center developers to increasingly look for ways to get power faster, including on-site, natural gas turbines, fuel cells, and other forms of behind-the-meter generation. And that's where it gets interesting.
Details
You can't solve a 38 GW power shortage with another Nvidia chip. Somebody has to actually generate the electricity. Somebody has to move that electricity around the data center. And somebody has to keep thousands of power-hungry graphics processing units (GPUs) from overheating. That's why I'm bullish on GE Vernova (NYSE: GEV), Eaton (NYSE: ETN), and Vertiv (NYSE: VRT).
Source
Originally published at www.fool.com.