The Power of AI Part II

Remember when the public was concerned that crypto currency mining required too much energy? Even Elon Musk worried about its environmental impact. We no longer hear about that. Why? The energy required for crypto currencies pales in comparison to what is needed to run Artificial Intelligence (AI) data centers.

My last article focused on the power of the AI companies and those who run them. Now we’ll cover a different type of power – the power needed to run AI. The energy required for AI data centers is expected to grow 50 percent a year through 2030 and in just three years it is expected to consume 13 percent of electricity demand. Efforts to fight global warming be damned.

This column is about investing and when it comes to investing, in AI there are the usual suspects. AI chip designer Nvidia leads the pack. Then there is Microsoft, Amazon, and Alphabet. But those are already well owned. What are the best under the radar AI stocks? That’s hard to know. In early internet days companies like AOL and Ask Jeeves seemed unstoppable … until they were stopped.

Instead of trying to choose who will benefit from AI, I prefer the more predictable approach of investing in the companies that are needed to build and power the AI data centers. Most of those stocks have already rallied, but the need for more power is in a grand supercycle.

The most direct AI power play might be GE Vernova (GEV). It is the leading provider in natural gas turbines and it also has exposure to small modular nuclear reactors. GEV is the second-best performing S&P 500 stock in 2025 so Wall Street understands its attractive position, but the general public isn’t aware, not yet. Speaking of nuclear, Vistra Corp (VST) is the second-largest nuclear operator in the U.S. and it also supplies natural gas, solar and battery storage facilities. Knowing which nuclear stock will benefit the most is difficult so I’m happy to simply own VanEck Nuclear and Uranium ETF (NLR).

One of my largest client holdings is Williams Cos. (WMB). Unlike the volatile choices above, Williams has a steady income stream and an attractive 3.5 percent yield. Williams is the prominent pipeline company that transports one-third of U.S. natural gas, which is then used to generate electricity for power centers and other uses. Last month regulators approved a Williams 400-MW natural gas-fired power plant in Ohio to serve a Meta Platforms data center. Their pipelines serve others, too.

David Vomund is an Incline Village-based Independent Investment Advisor. Information is found at http://www.VomundInvestments.com or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial advisor before purchasing any security.