Artificial Intelligence Development Increases Demand on Energy Companies

As artificial intelligence develops rapidly, demand for electricity and infrastructure needed to operate data centers is also growing, which is why energy companies are increasingly attracting investor attention.

According to specialists, in the coming years, trillions of dollars will be needed to supply data centers with electricity and cooling.

Two companies stand out particularly in this direction: Vertiv Holdings and GE Vernova, whose shares have appreciated significantly this year.

Vertiv manufactures cooling and power management systems for data centers. As artificial intelligence becomes more widespread, demand for its services is growing. The company's revenues are increasing by approximately 30% annually, significantly exceeding the market average rate.

According to McKinsey forecasts, more than 6 trillion dollars will be spent on the world's data centers by 2030. This creates opportunities for companies like Vertiv to receive new orders and increase revenues.

GE Vernova is one of the largest manufacturers of energy technology. The company produces gas turbines and other equipment necessary for electrical grids, and participates in global electricity generation. Demand for its products is so high that customers must wait a minimum of five years to receive a new turbine. The company's total order book reaches 163 billion dollars.

According to Goldman Sachs estimates, data center electricity consumption will increase by 165% by 2030. Economic slowdown may temporarily affect share prices, however, the expansion of data centers will further increase demand for energy infrastructure.

Source: Investing.com