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Bullish +75

3 Energy Stocks to Buy and 2 to Avoid as AI Power Demand Explodes

AI-generated analysis

📉 Every AI bull run faces a physical constraint in power, which is causing grid interconnection wait times to stretch beyond six years in some markets.

🔋 Data center shells are built but unpowered due to "Not In My Backyard" (NIMBY) pushback and regulatory friction against large-scale infrastructure.

💼 Hyperscalers like Meta, Microsoft, Amazon, and Alphabet are spending over $700 billion on data centers to stay ahead in a winner-take-all race for artificial general intelligence.

⚡ The investment thesis focuses on "bring your own power," which bypasses the grid via behind-the-meter generation solutions.

🌬️ GE Vernova holds a global monopoly with only two other companies capable of making natural gas turbines needed for 24/7 power plants.

📈 GE Vernova's order book shows turbine reservations sold out through 2030, with a backlog reaching $150 billion and slot agreements hitting 83 gigawatts by end-2025.

🔄 After spinning out of General Electric in 2024, GE Vernova is expected to improve its earnings margins from 3% towards peers' 20% as legacy costs burn off.

🔌 Bloomberg Energy's solid oxide fuel cells convert natural gas to electricity without combustion or grid connection for hyperscalers.

💡 Oracle's Project Jupiter campus in New Mexico will be powered entirely by Bloom Energy with a capacity of up to 2.45 gigawatts.

📦 Bloom Energy has secured contracts for up to 2.8 gigawatts across multiple deployments, aiming to scale annual capacity from 100 megawatts to 5 gigawatts by 2030.

💰 Each Bloom Energy deployment creates recurring revenue through catalyst replenishment service relationships rather than just one-time sales.

📊 Uniform accounting analysis reveals Bloom Energy was actually profitable in 2021 and 2022, contrary to conventional accounting reports that suggested losses.

🔥 Kodiak Gas Services is identified as a "double dip" investment opportunity involving fleet compression for natural gas infrastructure.

Bullish Signals
  • GE Vernova's gas turbine backlog and slot reservation agreements reached 83 gigawatts by the end of 2025, up from 62 gigawatts just one quarter earlier.
  • The company is targeting around 20 gigawatts of annual production capacity by mid-2026, with total backlog now sitting at $150 billion, a 26% year-over-year increase.
  • GE Vernova's turbine reservations are on track to be sold out through 2030, indicating strong future demand.
  • As GE Vernova expands capacity and burns off legacy costs, it is expected to grow into what its business should have been worth all along after the margin gap with peers closes.
  • Oracle has contracted for up to 2.8 gigawatts from Bloom Energy across multiple deployments following a deal announced in April 2026.
  • Bloom Energy has outlined an ambitious path to scale production from around 100 megawatts annually to 5 gigawatts per year by 2030.
  • Each fuel cell deployment for Bloom generates recurring revenue through periodic catalyst replenishment, creating a long-term service relationship.
  • Spivey's uniform accounting analysis reveals that Bloom was already profitable in 2021 and 2022, suggesting its actual earnings trajectory is stronger than traditional reporting indicates.
Risk Factors
  • Regulatory friction and 'NIMBYism' are creating significant delays, with grid interconnection wait times stretching beyond six years in some markets.
  • Many data center projects sit fully built but unpowered due to the inability of the traditional grid infrastructure to catch up to AI demand.
  • Hyperscalers like Meta Platforms are aggressively spending $125–$145 billion on capital expenditures for data centers, while Total hyperscaler spending is on pace to exceed $700 billion, indicating a potential bubble in current valuations.
  • GE Vernova historically operated with only 3% earnings margins compared to peers at roughly 20%, and it remains subject to legacy costs inherited from General Electric that could weigh on profitability despite recent growth.
  • Bloom Energy's aggressive scaling targets face significant uncertainty, aiming to jump from around 100 megawatts of annual capacity two years ago to 5 gigawatts per year by 2030.
Full Analysis
Nvidia-related AI power demand is driving investment opportunities in specific energy infrastructure plays, according to research by Rob Spivey at Altimetry Research. The core thesis is that the rapid growth in artificial intelligence training and data center operations has created a physical constraint: a severe shortage of reliable electricity. Federal Energy Regulatory Commission projections indicate U.S. power demand will grow from 24 gigawatts in 2022 to 166 gigawatts by 2030, far outpacing grid expansion capabilities which suffer from regulatory friction and "NIMBYism" opposition in many markets. Spivey highlights three companies positioned to capture value through "bring your own power" strategies that bypass traditional grid interconnection delays. First is GE Vernova (NYSE: GEV), which faces a supply constraint as it holds a near-monopoly alongside two competitors on global natural gas turbine production for baseload power plants. The company's backlog has surged to $150 billion with order reservations extending through 2030, and Spivey notes its earnings margins are expected to improve significantly as legacy costs from General Electric spin-off dissipate against uniform peer standards of roughly 20%. Second is Bloom Energy (NYSE: BE), which manufactures solid oxide fuel cells for off-grid power generation. The company recently secured a landmark validation with Oracle's Project Jupiter in New Mexico, where Bloom will supply up to 2.8 gigawatts of capacity using its fuel cell technology. Spivey's uniform accounting analysis reveals Bloom was likely profitable as early as 2021 and 2022 despite conventional accounting showing losses, while the company targets scaling annual production from roughly 100 megawatts today to 5 gigawatts by 2030. The third recommended holding is Kodiak Gas Services (NYSE: KGS), a contract compression firm providing infrastructure that pushes natural gas through pipelines to power plants. The article notes a "double dip" opportunity for investors in this segment, implying both revenue growth from the AI boom and a second potential catalyst as demand for clean energy solutions accelerates. Additionally, Spivey explicitly warns against two other sectors or companies: traditional utilities stuck waiting for grid approvals and pure-play energy transition firms like NextEra Energy (NNE) if they rely solely on slow regulatory processes rather than direct power generation capabilities.