AI is a megatrend, and the datacenters powering it need massive energy. This disruption will continue to create exceptional investment opportunities (ranging from nuclear energy to infrastructure and supporting technologies). This report ranks my top 10 AI energy stocks set to benefit from the megatrend, starting with #10 and counting down to my very top ideas. Enjoy!
Overview: Surging Demand for Energy in Data Centers due to AI
Before getting into the rankings, it makes sense to first consider a few important megatrend data points. For example, according to the International Energy Agency, global electricity demand from datacenters is projected to more than double by 2030, reaching around 945 terawatt-hours (roughly equivalent to Japan's current total power usage). And
Deloitte forecasts that AI-specific datacenter power needs could grow 30-fold by 2035 (basically fueled by hyperscalers like Microsoft and Google). In the US, datacenters already consume over 4% of electricity, potentially rising to 12% by 2028 (and thereby pushing utilities and enterprising innovators towards nuclear and increasingly efficient infrastructure solutions).
Top 10 AI Energy Stocks Ranked
So with that backdrop in mind, let’s get into the top 10 rankings.
10. Oklo Inc (OKLO):
According to their website, “Oklo is developing next-generation fission powerhouses to produce abundant, affordable, clean energy at a global scale.” Which, in a nutshell, is exactly what the datacenters supporting the AI megatrend need. The shares are already up dramatically this year (as you can see in the table below), but the potential growth is extreme. According to Forbes, the growth is attributable to a combination of factors, including “federal project approvals, the increasing energy needs of AI and data infrastructure, strategic alliances, and a regulatory environment that is becoming more favorable to nuclear energy.” And with a total addressable market estimated at $75 billion per year, but a current market cap of only $14 billion, these shares still have a ton of long-term upside potential.
9. NuScale Power (SMR):
Ahead of Oklo, NuScale’s is the first SMR (small modular reactor) to receive design approval from the US Nuclear Regulatory Commission (in January 2023). It’s also up big already this year (see table above) but has massive revenue growth and is positioned to potentially take a large share of the AI-driven market opportunity for energy. This is early-stage and speculative (perhaps a bit less-so than Oklo), but that’s often where the best (albeit volatile) opportunities are found.
8. Bloom Energy (BE):
Bloom Energy manufactures solid oxide fuel cells for distributed power generation, including for AI data centers seeking reliable energy. Its 19% sales growth next year and focus on alternative power solutions offer exposure to the AI ecosystem. Bloom Energy's partnerships with Oracle, Equinix, and AEP for SOFC deployments address AI data centers' need for on-site, low-carbon power, with projections of 38% on-site generation by 2030. Bloom’s price/sales of 9.5x is actually somewhst reasonable as compared to the market opportunity for clean energy adoption.
You can view my full report on Bloom Energy here.
The Top 7 AI Energy Stocks
The top 7 AI-Energy Stocks are reserved for members only, and you can access them here. The list includes a compellng mix of opportunities, ranging from utilities companies, to industrials and electrical equipment. The space currently presents highly-attractive disruptive opportunities.
Conclusion
Anytime any type of stock performs well, some investors are quick to cry “bubble.” But the AI megatrend has long-term legs and the growth for these companies (as energy demand explodes) is just getting started.
It’s important to only invest in what is right for you (based on your own individual and unique situation), but if you are a long-term-growth investor, stocks benefiting from explosive AI energy demand (such as those listed in this report) are absolutely worth considering for a spot in your prudently concentrated long-term portfolio.