LIVE MARKETS-Power constraints create new winners in the AI boom
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POWER CONSTRAINTS CREATE NEW WINNERS IN THE AI BOOM
Morgan Stanley says the AI spending boom is increasingly benefiting data center builders and power suppliers, as cloud companies lease new facilities and secure long-term power contracts to support their expanding AI infrastructure.
The US Energy Information Administration said AI-driven data center expansion will continue to strain US power supplies, with electricity demand expected to reach record highs in 2026 and 2027 as hyperscalers add capacity to support growing AI workloads.
The brokerage estimates the US could face a 32-gigawatt power shortfall through 2028. As hyperscalers race to secure electricity and deploy new capacity, power generation, electrical equipment, and data center infrastructure providers are emerging as key beneficiaries.
Companies exposed to on-site and backup power generation, including ERock EROC.N, Cummins CMI.N and Caterpillar CAT.N, stand to gain from rising hyperscaler investment. Meanwhile, power equipment providers such as GE Vernova GEV.N and Bloom Energy BE.N are expected to benefit from increasing AI-related capital spending, which should support order backlogs and margins.
The opportunity extends beyond power generation. Electrical and cooling suppliers including Vertiv VRT.N, Eaton ETN.N, Trane Technologies 2IS.F, Johnson Controls JCI.N and Carrier Global CARR.N are well positioned as customers seek faster deployment of increasingly complex AI data centers.
At the same time, Morgan Stanley highlights a less visible driver of AI spending: lease-financed data center investment. The brokerage estimates lease-financed capex will add roughly $195 billion to 2027 AI spending, lifting total AI-related capital expenditure to about $1.6 trillion.
Because hyperscalers increasingly lease data center facilities rather than own them outright, a growing share of spending is occurring outside traditional capex disclosures.
As a result, developers, power suppliers and infrastructure providers are capturing a larger share. The AI story is broadening beyond chips, with access to power and physical infrastructure becoming just as critical as computing capacity itself.
(Kanishka Ajmera)
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