Power Shortfall Drives Investment Opportunities in AI Infrastructure Stocks

America’s electric grid is struggling to keep pace with the exponential growth in computing power and data-center demand, creating a severe power deficit that analysts believe will drive significant investment opportunities. According to a new report from Morgan Stanley, the U.S. faces a potential shortfall of 33 gigawatts through 2028, a figure that represents approximately 34% of current chip demand.

Stephen Byrd, an analyst at Morgan Stanley, highlighted in a Monday note that the gap may be even more pronounced than previously estimated because data centers are advancing faster in efficiency than the public grid can accommodate. While “time-to-power” solutions such as off-grid generation can mitigate connection delays, the underlying supply-and-demand imbalance remains a critical factor for the energy sector.

Byrd identifies several categories of companies poised to benefit from this crunch. The first includes “powered shell providers”—firms that already control grid capacity and can repurpose it for data-center development. He specifically recommends Cipher Digital, Hut 8, Riot Platforms, Galaxy Digital, and Terawulf, predicting that each will secure at least one major data-center lease within the next six months.

Paul Meeks, an analyst at Freedom Capital Markets, echoed these concerns, telling MarketWatch that the power gap is already wide and could deteriorate rapidly. He noted that stocks of companies with existing power agreements, such as Cipher Digital, Terawulf, and Hut 8, could see further gains if scarcity intensifies.

Another key area of opportunity lies in “behind-the-meter” power generation. This technology allows energy-intensive facilities to produce and store electricity on-site rather than relying solely on the public grid. Byrd anticipates a surge in demand for equipment from manufacturers such as Bloom Energy, GE Vernova, and Cummins. He expects a flurry of transactions in West Texas, where data-center developers and AI companies are likely to partner with project developers like Solaris Energy Infrastructure and Vistra.

Even SpaceX has emerged as a potential beneficiary, albeit through an indirect route. Byrd pointed out that Elon Musk’s company acquired APR Energy earlier this year, a provider of mobile gas turbines and power plants. “SpaceX has a history of attacking whatever constrains scale most,” Byrd observed, suggesting the company is targeting the turbine manufacturing segment as it builds its moat in compute time and power costs.