The data center gold rush is still in its early innings, but the market is already grappling with a squeeze in power availability, with companies that can provide energy swiftly poised to benefit, according to BTIG. The line to connect new power plants to the grid has surged to 1.6 terawatts, resulting in major bottlenecks in meeting energy demand, a team of analysts led by Gregory Lewis found. It currently takes nearly five years on average for a new power project to start commercial operations after filing the initial request for a grid connection. “Speed to market for some data centers matters,” the analysts told clients in a Thursday research note. This should provide opportunities for companies that can provide on-site solutions that allow data centers to skip the interconnection line, they said. BTIG recommends Bloom Energy , Core Scientific and FTAI Infrastructure as ways to play the power shortage theme. The analysts raised their price targets for the trio. Bloom Energy is up 59% over the past three months, while Core Scientific has gained 116%. FTAI has advanced 53% during the same period. Bloom can provide energy through on-site fuel cells that run on natural gas or hydrogen. The company signed a contract with Intel last month to power a data center in California. BTIG’s price target suggests 34% upside from Wednesday’s close. Core Scientific is a Bitcoin miner that is diversifying into data centers. The company signed an agreement to supply 200 megawatts of power to CoreWeave last month, which is paying to convert that power from crypto mining to data centers. BTIG’s new price target calls for nearly 40% upside. FTAI is an infrastructure company that also operates natural gas assets. BTIG sees the stock rising 42%.
Three stocks to play the booming energy needs of AI data centers, according to BTIG
About the author
