How are energy investors positioned?
Investing.com -- Shares of power and electrical equipment companies surged in trading following reports of Meta Platforms Inc. (NASDAQ:META) engaging in discussions to construct a vast data center campus dedicated to artificial intelligence (AI) projects. The ambitious undertaking is estimated to exceed $200 billion in costs, signaling a robust demand for power infrastructure.
NANO Nuclear Energy (NYSE:NNE) saw its shares climb 6.6%, Oklo Inc. (NASDAQ:OKLO) enjoyed a 7.0% increase, Vistra Corp. (NYSE:VST) was up 3.7%, Celestica Inc . (NYSE:CLS) rose 4.3%, Vertiv Holdings Co (NYSE:VRT) increased 3.1%, Constellation Energy Corporation (NASDAQ:CEG) gained 3%, and NuScale Power (NYSE: SMR) advanced 5%.
The surge in stock prices is attributed to Meta’s potential new data center campus, which would be several times larger than any of its existing facilities, including a recently discussed AI data center in Louisiana. This expansion, reported by The Information yesterday after the market close, reflects Meta’s strategy to meet an expected multiyear surge in demand for generative AI across its billions of users.
Meta’s CEO Mark Zuckerberg has hinted at substantial investments in AI infrastructure, with plans to allocate "hundreds of billions of dollars" over the long term. Although Meta has projected its capital expenditures to soar between $60 billion and $65 billion this year, nearly a 70% increase from the previous year, it remains unclear if this includes spending on the new data center project.
This development comes as tech giants like Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) are also ramping up their AI development efforts, with substantial capital investments. The competition in the AI space is intensifying, with firms like OpenAI and Google vying for consumer attention with their AI models, alongside emerging technologies like DeepSeek, which offers cost-effective AI solutions.
Meta is considering several states, including Louisiana, Wyoming, or Texas, for the construction of the new campus. The company’s executives have reportedly visited potential sites this month and discussed the requirement of 5 to 7 gigawatts of power for the campus, a scale that underscores the magnitude of the project.
The market’s response to these reports reflects the anticipated increase in demand for power and electrical equipment as tech companies like Meta aggressively expand their AI capabilities. The move also highlights the broader industry trend towards significant investments in AI infrastructure, which is expected to drive growth in the power sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.