5 Great AI Infrastructure Stocks to Buy on a Dip
The Motley Fool ·
Key points
- GE Vernova’s business model hinges on gas power turbines that generate long-term service revenue under LTSAs tied to equipment sales, supplying power for AI data centers. Its backlog reached about $197 billion by the end of the third quarter and is expected to top $200 billion, signaling substantial future revenue momentum.
- Vertiv provides power and cooling solutions integral to AI data centers and has repeatedly increased its full-year guidance. Executives emphasize accelerating data-center demand even as operational constraints persist, with margin guidance rising alongside revenue projections (e.g., revenue targets climbing to $14.65B by October and margins around 24%).
- ON Semiconductor is collaborating with Nvidia on 800V HVDC data-center architectures, underscoring the importance of power and sensing chips in AI deployments. Management lifted the 2027 AI data-center revenue outlook to at least $1.24B and projects continued growth through 2030, supported by a broader 2026 revenue target of $6.6B.
- Comfort Systems USA benefits from growing contracting activity in data centers, with customers placing larger, earlier commitments due to scarce capacity. The company notes heightened demand across its data-center projects, implying sustained backlog expansion and recurring installation opportunities.
- SPX Technologies stands to gain from data-center cooling demand, particularly through its cooling towers and from rising emphasis on water reuse mandates. This positions SPX to benefit alongside the broader trend of increasingly sophisticated data-center environmental controls and resource management.
Summary
A cluster of AI infrastructure stocks is seen as attractive after a sector dip, with improving earnings momentum cited for GE Vernova, Vertiv, ON Semiconductor, Comfort Systems USA, and SPX Technologies. The narrative centers on accelerating data-center demand and expanding backlogs, supported by long-term service revenue and critical infrastructure needs like power, cooling, and HVDC components. Despite a pullback in stock prices, management teams indicate resilient or strengthening outlooks and revising guidance higher as orders grow. The forward view suggests continued expansion in AI data-center spending, with these players positioned at different points of the supply chain. Momentum may stall and reaccelerate with data-center investments and energy infrastructure cycles ahead.
This summary was written with AI. The full story has every detail.