Artificial intelligence (AI) has evolved into more than just a buzzword. AI stocks have wide applications across a variety of industries and have generated huge amounts of wealth for investors over the past few years. As the revolution gets into full swing, the surrounding infrastructure supporting AI platforms is also expected to boom in the coming years. One of the key cogs in the AI ​​ecosystem is data centers.
With the demand for data centers expected to double by 2030, market participants are advised to take a closer look at the players in this space to identify potential winners. As a result, Goldman Sachs (GS) analysts are also quite bullish on the upside potential here. The company estimates that about 47 gigawatts of additional generation capacity will be needed by 2030 to meet the growing power demand of U.S. data centers, which will result in approximately $50 billion in capital investment. is predicted.
Given the massive growth outlook for data center names, here are the top five stocks that Goldman expects to benefit from this megatrend.
#1: Sempra
Founded in 1998 and based in San Diego, Sempra (SRE) is an energy infrastructure company focused on clean power, energy networks, LNG and net zero solutions. Its business model revolves around infrastructure ownership and operation, LNG export and regasification, and renewable energy development. The current market capitalization is $46 billion.
SRE stock is down 2.4% year-to-date and has a dividend yield of 3.30%.
Overall, analysts consider the stock a Strong Buy, with an average price target of $83.35, implying an upside potential of approximately 14.3% from current levels. Of the 16 analysts covering the stock, 11 have a “strong buy” rating, one has a “moderate buy” rating, and four have a “hold” rating.
#2: nVent Electric
Founded in 2018 as a spin-off from Pentair (PNR), nVent Electric (NVT) designs, manufactures and markets electrical connectivity and protection solutions for a variety of industrial, commercial and residential applications. The company's major product categories include enclosures, connectors, cable management systems, and heat tracing solutions. The current market capitalization is $11.9 billion.
nVent Electric stock is up 28% year-to-date. The dividend yield is also 1.01%.
Analysts' consensus rating for NVT stock is a “fair buy,” with an average price target of $81.60. This suggests around 7.5% upside potential from current levels. Of the 10 analysts covering the stock, six have a “strong buy” rating, one has a “fair buy” rating, and three have a “hold” rating.
#3: Xcel Energy
Headquartered in Minneapolis, Xcel Energy (XEL) operates as a regulated electric utility primarily engaged in the generation, transmission and distribution, and retail sales of electricity. The current market capitalization is $29.88 billion.
XEL stock is down 12.4% year-to-date and has a dividend yield of 3.92%.
Overall, analysts have an average rating of “Moderate Buy” on XEL stock, with an average price target of $62.23, implying an upside potential of approximately 14.7% from current levels. Of the 14 analysts covering the stock, 7 rate it a “strong buy” and 7 rate it a “hold.”
#4: First Solar
Founded in 1999, First Solar (FSLR), based in Tempe, Arizona, is a leading manufacturer of thin-film solar panels, a technology known for its low cost and high efficiency. The company primarily designs and produces thin-film solar panels in its own manufacturing facilities and focuses on selling solar panels directly to project developers and utility companies for large-scale solar power plants. The current market capitalization is $19.3 billion.
FSLR stock is up 11.2% year-to-date.
Overall, analysts consider the stock a Strong Buy, with an average price target of $227.39. This suggests an upside potential of approximately 18.7% from current levels. Of the 30 analysts covering the stock, 24 have a “strong buy” rating, one has a “moderate buy” rating, and five have a “hold” rating.
#5: Fluence Energy
Most recently founded in 2017, San Francisco-based Fluence Energy (FLNC) is a leading provider of energy storage solutions, with a particular focus on energy storage systems (ESS) and software and services. . The ESS division will be engaged in manufacturing design and deployment of grid-scale battery storage systems for various applications, while the software division will develop software platforms to manage and optimize energy storage systems. The current market capitalization is $3.48 billion.
FLNC stock is down 12.4% year-to-date.
Overall, analysts rate FLNC a Strong Buy, with an average price target of $29.83. This suggests an expected upside potential of approximately 42.7% from current levels. Of the 23 analysts covering the stock, 17 have a “strong buy” rating, two have a “fair buy” rating, three have a “hold” rating, and one has a “strong sell” rating. ing.
On the date of publication, Pathikrit Bose did not have (directly or indirectly) any positions in the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please see the Barchart Disclosure Policy here.
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