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3 Must-Buy Non-Tech Stocks for the Long Term Amid AI Data Center Boom
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Key Takeaways
MTZ, FIX, TLN are poised to gain from AI-driven data center growth.
FIX benefits from rising demand for precision HVAC systems in advanced data centers.
TLN expands nuclear deal with Amazon to supply AWS centers with 1,920 MW of clean power.
The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to unfold fully. The demand for data center capacity surged to manage and store the vast amount of cloud computing-based data.
The AI infrastructure space remains rock solid supported by an extremely bullish demand scenario. Research firm McKinsey & Co. estimated that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030.
In order to reap the benefit of this enormous opportunity, we recommend investors buy three non-technology U.S. bigwigs at this stage and hold for the long term. These companies are set to immensely benefit from an AI-induced data center boom.
Zacks Rank #1 Comfort Systems USA is a national provider of comprehensive heating, ventilation and air conditioning (HVAC) installation, maintenance, repair and replacement services. FIX operates primarily in the commercial and industrial HVAC markets, and performs most of its services within manufacturing plants, office buildings, retail centers, apartment complexes, and healthcare, education and government facilities.
The data center boom, driven by AI, cloud computing, and high-performance computing, is fueling demand for the specialized HVAC solutions of FIX. Cooling systems for these facilities should deliver precise and reliable performance, prompting investments in advanced technologies such as liquid cooling and modular units.
This segment is becoming a significant growth driver for FIX, offering high-margin opportunities and attracting M&A activity. HVAC firms with capabilities in precision cooling and energy-efficient infrastructure are well-positioned to capture share in this fast-expanding niche.
Comfort Systems USA has an expected revenue and earnings growth rate of 15.5% and 52.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% in the last seven days.
Talen Energy Corp.
Zacks Rank #2 Talen Energy is an independent power producer and infrastructure company that produces and sells electricity, capacity, and ancillary services into wholesale power markets in the United States. TLN operates nuclear, fossil, solar, and coal power plants. TLN is also developing battery storage projects.
Amazon.com Inc. (AMZN) has partnered with TLN in Pennsylvania to power its data centers with nuclear energy. On June 11, TLN announced the expansion of its existing nuclear energy relationship with Amazon to provide carbon-free energy from Talen’s Susquehanna nuclear power plant to Amazon Web Services (“AWS”) data centers in the region.
According to the agreement, TLN will provide AMZN with 1,920 megawatts of carbon-free nuclear power through 2042, with options to further extend its duration. TLN is expected to significantly benefit from the data centers’ astonishing demand for reliable and clean energy.
U.S. electricity supply will have to expand more than 5X faster than the prior two decades to meet demand, according to AI industry projections. Data centers could jump from 4% of total U.S. power demand in 2023 to over 12% in 2030. Data center demand is already straining the grid and sending prices soaring. Alongside nuclear energy, the rapid build-out of AI data centers is also fueling surging natural gas demand. Talen made a major natural gas deal in the middle of July that will increase its annual generation by 50%.
Talen Energy has an expected revenue and earnings growth rate of 11.7% and -38.8%, respectively, for the current year. The Zacks Consensus Estimate for currentt-year earnings has improved 0.9% in the last seven days.
MasTec Inc.
Zacks Rank #2 MasTec is an infrastructure construction company providing engineering, building, installation, maintenance, and upgrade services for communications, energy, utility, and other infrastructure primarily in the United States and Canada.
MTZ is helping lead the charge in the once-in-a-lifetime expansion of the energy industry, which has only just begun, to support power-hungry AI, reshoring, and more. The company is a major beneficiary of the AI-powered data center boom.
MTZ is a leading solution provider for design, construction, and maintenance services in the wireless network space. High-speed wireless network connectivity is of utmost importance as both enterprises and households use more AI-driven products.
MTZ operates four segments: Communications (wireless and wireline/fiber infrastructure), Power Delivery (utility transmission and distribution), Pipeline Infrastructure (natural gas pipeline and distribution services) and Clean Energy and Infrastructure (renewable energy and heavy civil/industrial projects). The power-hungry AI age, electrification, and the reshoring of critical manufacturing such as semiconductors are all happening at the same time. MTZ’s entire portfolio is growing directly alongside the converging infrastructure spending megatrend.
MasTec has an expected revenue and earnings growth rate of 13.6% and 58%, respectively, for the current year. The Zacks Consensus Estimate for next year’s earnings has improved 2.6% in the last 60 days.
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3 Must-Buy Non-Tech Stocks for the Long Term Amid AI Data Center Boom
Key Takeaways
The artificial intelligence (AI) saga, supported by the massive growth of cloud computing and data centers, is yet to unfold fully. The demand for data center capacity surged to manage and store the vast amount of cloud computing-based data.
The AI infrastructure space remains rock solid supported by an extremely bullish demand scenario. Research firm McKinsey & Co. estimated that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030.
In order to reap the benefit of this enormous opportunity, we recommend investors buy three non-technology U.S. bigwigs at this stage and hold for the long term. These companies are set to immensely benefit from an AI-induced data center boom.
These companies are: MasTec Inc. (MTZ - Free Report) , Comfort Systems USA Inc. (FIX - Free Report) and Talen Energy Corp. (TLN - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comfort Systems USA Inc.
Zacks Rank #1 Comfort Systems USA is a national provider of comprehensive heating, ventilation and air conditioning (HVAC) installation, maintenance, repair and replacement services. FIX operates primarily in the commercial and industrial HVAC markets, and performs most of its services within manufacturing plants, office buildings, retail centers, apartment complexes, and healthcare, education and government facilities.
The data center boom, driven by AI, cloud computing, and high-performance computing, is fueling demand for the specialized HVAC solutions of FIX. Cooling systems for these facilities should deliver precise and reliable performance, prompting investments in advanced technologies such as liquid cooling and modular units.
This segment is becoming a significant growth driver for FIX, offering high-margin opportunities and attracting M&A activity. HVAC firms with capabilities in precision cooling and energy-efficient infrastructure are well-positioned to capture share in this fast-expanding niche.
Comfort Systems USA has an expected revenue and earnings growth rate of 15.5% and 52.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 2% in the last seven days.
Talen Energy Corp.
Zacks Rank #2 Talen Energy is an independent power producer and infrastructure company that produces and sells electricity, capacity, and ancillary services into wholesale power markets in the United States. TLN operates nuclear, fossil, solar, and coal power plants. TLN is also developing battery storage projects.
Amazon.com Inc. (AMZN) has partnered with TLN in Pennsylvania to power its data centers with nuclear energy. On June 11, TLN announced the expansion of its existing nuclear energy relationship with Amazon to provide carbon-free energy from Talen’s Susquehanna nuclear power plant to Amazon Web Services (“AWS”) data centers in the region.
According to the agreement, TLN will provide AMZN with 1,920 megawatts of carbon-free nuclear power through 2042, with options to further extend its duration. TLN is expected to significantly benefit from the data centers’ astonishing demand for reliable and clean energy.
U.S. electricity supply will have to expand more than 5X faster than the prior two decades to meet demand, according to AI industry projections. Data centers could jump from 4% of total U.S. power demand in 2023 to over 12% in 2030. Data center demand is already straining the grid and sending prices soaring.
Alongside nuclear energy, the rapid build-out of AI data centers is also fueling surging natural gas demand. Talen made a major natural gas deal in the middle of July that will increase its annual generation by 50%.
Talen Energy has an expected revenue and earnings growth rate of 11.7% and -38.8%, respectively, for the current year. The Zacks Consensus Estimate for currentt-year earnings has improved 0.9% in the last seven days.
MasTec Inc.
Zacks Rank #2 MasTec is an infrastructure construction company providing engineering, building, installation, maintenance, and upgrade services for communications, energy, utility, and other infrastructure primarily in the United States and Canada.
MTZ is helping lead the charge in the once-in-a-lifetime expansion of the energy industry, which has only just begun, to support power-hungry AI, reshoring, and more. The company is a major beneficiary of the AI-powered data center boom.
MTZ is a leading solution provider for design, construction, and maintenance services in the wireless network space. High-speed wireless network connectivity is of utmost importance as both enterprises and households use more AI-driven products.
MTZ operates four segments: Communications (wireless and wireline/fiber infrastructure), Power Delivery (utility transmission and distribution), Pipeline Infrastructure (natural gas pipeline and distribution services) and Clean Energy and Infrastructure (renewable energy and heavy civil/industrial projects).
The power-hungry AI age, electrification, and the reshoring of critical manufacturing such as semiconductors are all happening at the same time. MTZ’s entire portfolio is growing directly alongside the converging infrastructure spending megatrend.
MasTec has an expected revenue and earnings growth rate of 13.6% and 58%, respectively, for the current year. The Zacks Consensus Estimate for next year’s earnings has improved 2.6% in the last 60 days.