Marcos Milla
Former Analyst at the Federal Reserve, ETF/Stock Newsletter Author
Dycom looks compelling because its infrastructure backlog and operating execution position it to benefit from AI's demand for power, fiber, and data centers. Its backlog has grown to $12.2 billion from $8 billion a year ago, Building Systems EBITDA margins exceed 20%, and Power Solutions is running 30% ahead of acquisition expectations. The long-term growth opportunity may be underappreciated as the market focuses on near-term margin pressure. x.comÂ
Record data-center construction supports Sterling Infrastructure, Quanta Services, Comfort Systems USA, Vertiv and Argan. Per The Kobeissi Letter, US data-center construction spending jumped 46% YoY in June to a record $68 billion annualized rate, up 158% since January 2024, and now exceeds office construction by a record $25 billion. Kobeissi calls AI the driver of the biggest investment wave in US history. x.comÂ
Meta's swelling construction in progress has not entered the depreciation base yet. It reached $89.5B in September, up from $26.8B at the end of 2024, largely from data centers, servers and network infrastructure. At its recurring quarterly pace, it is highly likely, by this estimate, to surpass $100B by year-end, nearly quadrupling in two years, a roughly $73B increase. x.comÂ
Dell should benefit from AI data-center construction because builders say almost every new facility runs on Dell or Super Micro servers. Sales rose 49% in the past year to $151B; Dell is 18% below its high and is an easy double from here. x.comÂ
Modine Manufacturing is a pure play on data-center thermal management, and its November 18 investor day could send it higher if it confidently sets big 2028-29 targets. It already cites two hyperscalers and one neocloud as customers, and which hyperscalers they are does not matter. Its valuation, which had grown stretched along with Vertiv's, now looks more intriguing than ever. x.comÂ
Big Digital looks significantly undervalued and should pop on deals. Per Big Digital, its Texas Load House site in Hood County has 17 MW live with a near-term path to 111 MW, subject to ERCOT. Tensor IQ is the offtake on that 17 MW for 7,748 Nvidia B300s targeted for Q2 2027, subject to definitive agreements, with indicative 15-year power-lease revenue of about $546 million at full utilization. x.comÂ
Applied Digital is set to benefit as hyperscaler capex commitments jumped from about $400 billion to nearly $700 billion in 90 days. It holds about $16 billion in contracted lease revenue, has three sites in exclusivity and expects new leases soon. Q3 revenue rose 139% to $126.6 million, crushing the $75.5 million consensus. CoreWeave upgraded its lease terms, which should lower refinancing costs, and management bonuses are tied to a goal of $1 billion in annual profit. x.comÂ
Distributed compute in smaller modular data center builds sounds bullish for Ciena. Another investor's call with a data center operator flagged that trend as one shaping where optical networking is heading. x.comÂ
Blackstone Data Centers brings an institutional-grade data center platform to public markets just as AI-driven infrastructure demand accelerates globally. The listing is notable because Blackstone has spent years taking discounted REITs private, including American Campus Communities and PS Business Parks, when buying whole companies was cheaper than buying their properties one by one. x.com x.comÂ
Digital Realty's $3.5 billion Blackstone data center stake deal monetizes hyperscale capacity at peak demand rather than diluting shareholders, so the market's 5% selloff on the news is wrong. The AI power infrastructure trade remains structurally underowned. x.comÂ