Published on 28 May 2024 on Insider Monkey via Yahoo Finance
Beyond NVIDIA (NVDA): Hedge Funds are Buying This Utility Stock to Profit from the AI Boom
We recently analyzed 8 best utilities stocks to buy to profit from the AI boom according to hedge funds. Since Constellation Energy Corp (NASDAQ:CEG) was part of the list, the stock deserves a deeper look. But first, let's see why everyone's taking about AI catalysts for utilities stocks these days.
The AI revolution that started with the launch of ChatGPT has catapulted several sectors into the limelight that were hitherto believed to be unrelated to AI. Utilities is one of the most notable of these sectors. As more and more companies deploy AI in their systems and develop new applications, they need high-performance data centers to power their AI processing chips. And these data centers are power hogs. Why? Goldman Sachs in a recent report titled AI, data centers and the coming US power demand surge said that a single ChatGPT query takes about 6 to 10 times as much electricity to process as a typical Google search. Goldman Sachs also expects AI-led data center boom to cause a 160% increase in power demand in the U.S. Goldman analysts estimate that utility companies will invest $50 billion to support this new demand from the data center sector.