Data Centers, AI, and Cryptocurrency to Drive Electricity Demand
Barclays has identified several investment opportunities in the growing demand for electricity driven by data centers, artificial intelligence (AI), and the cryptocurrency sector. The International Energy Agency (IEA) predicts that electricity consumption from these sectors could double by 2026. Data centers are considered significant drivers of this trend, with their global electricity consumption projected to reach over 1,000 terawatt hours in 2026. Barclays emphasizes the importance of accelerated investments in backup power, energy storage, and cooling to meet this rising demand.
Investment Areas: Data Center Operators, Suppliers, and Infrastructure Builders
Barclays highlights three investment areas related to the increasing demand for “green data centers” worldwide. These areas include data center operators, suppliers, and infrastructure builders. Microsoft is among the top picks due to its expansive data center footprint and sustainability targets. The tech giant aims to operate on entirely renewable energy sources by 2025 and has expressed interest in using nuclear energy via small modular reactors to power its data centers. Digital Realty Trust is another recommended investment option, with a diverse portfolio of over 300 facilities globally and a focus on renewable energy.
Additional Investment Opportunities
Barclays also identifies Advanced Micro Devices (AMD) as a promising data storage play. AMD is working on improving the energy efficiency of its processors for AI training and high-performance computing. Other recommended investments include Amazon, Eaton (a power management company), and chipmaker Advanced Micro Devices.
Hot Take: Seizing Opportunities in the Growing Data Center Boom
The increasing demand for electricity from data centers, AI, and cryptocurrency presents lucrative investment opportunities. Companies like Microsoft, Digital Realty Trust, and Advanced Micro Devices are well-positioned to benefit from this trend. As the push for “green data centers” gains momentum, investments in backup power, energy storage, and cooling solutions become crucial. The potential for accelerated growth in this sector is significant, and investors should consider capitalizing on the rising demand for electricity driven by data centers and emerging technologies.
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