A recent AI deal reveals an unexpected group of companies that could benefit from the industry’s biggest bottlenecks.
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Hello, Reader.
In the 1989 film Field of Dreams, the famous line goes: “If you build it, they will come.” But in the AI boom, the saying may need an update:
“If you build it, communities will protest. But if you have already built it, they may come.”
The “it” here is data centers. As AI firms race to build more data centers, communities are increasingly pushing back against new projects.
On July 18 alone, 142 protests took place across 42 states in the first nationwide protest effort against the rapid expansion of AI data centers. And Data Center Watch reports that at least 75 U.S. data-center projects worth about $130 billion were blocked or delayed in the first quarter of this year.
At the same time, AI’s appetite for computing power continues to grow. That brings us to the “they” – AI companies desperate for more computing power.
A simple supply-and-demand problem is happening here: New capacity is becoming harder to build just as demand for AI computing continues to soar.
And that imbalance is creating a new opportunity.
When new capacity becomes harder to build, existing capacity becomes more valuable. And companies that already have the land, power and facilities needed for AI data centers could be sitting on valuable real estate – literally.
And a deal made this week between AI giant Anthropic and an unlikely infrastructure provider offers a glimpse of what that opportunity could look like.
So, in today’s Smart Money, I’ll take a closer look at that deal to show you how one AI bottleneck can create opportunities across multiple industries. Then, I’ll reveal how we’re positioning for those very opportunities.
AI Buys What’s Already Built
On Tuesday, Anthropic reportedly signed a 20-year, $9.1 billion deal with Riot Platforms, Inc. (RIOT) for 191 megawatts of data-center capacity at Riot’s Rockdale, Texas, campus. Riot expects the deal to generate about $9.1 billion through 2048, with an option that could push the total value to $16.1 billion. The capacity is expected to be delivered in phases, beginning in 2026 and continuing through 2028.
The key here is that Riot doesn’t have to start from scratch. The company, best known as a bitcoin miner, already has the land, power and infrastructure needed to support a data center. So, instead of using all of that capacity for bitcoin mining, it can lease it to AI companies, like Anthropic.
Riot already struck a deal with Advanced Micro Devices Inc. (AMD) for up to 200 MW of data-center capacity earlier this year. The Anthropic deal takes that strategy much further.
As demand for computing power rises and new data centers become harder to build, sites that already have power and infrastructure could become increasingly valuable, even if they were originally built for something completely different.
Anthropic and Riot’s billion-dollar-deal shows how much AI companies are willing to pay for capacity they can actually access. But the bottleneck doesn’t stop at data centers. Building all this AI infrastructure requires a massive amount of power, equipment, and raw materials.
It reaches all the way down to the materials and equipment needed to build them.
That means AI’s rapid growth is creating investment opportunities at every rung of the AI ladder…
The Ladder of Opportunity
One single stock, industry, or sector simply can’t capture the entire opportunity. For instance, the technology needs:
Power generation – AI data centers need enormous amounts of electricity, and power producers supply it. As AI drives demand for new data-center capacity, companies that generate and sell that electricity can benefit.
Grid infrastructure – Data centers also need to connect to the power grid. Companies supplying transformers, substations, transmission equipment and other grid infrastructure are helping make the AI buildout possible.
Cooling – AI chips generate enormous amounts of heat, making cooling systems essential to keeping data centers operational. Companies providing liquid cooling, HVAC, and other thermal-management systems are well-positioned to benefit from the expansion of AI infrastructure.
Construction – Someone has to build all those data centers and power facilities. Construction and engineering companies that design and construct the infrastructure are another part of the opportunity.
Semiconductors – Companies like Nvidia Corp. (NVDA) supply the chips that provide the computing power AI systems require, making semiconductors a core part of the physical infrastructure behind the AI boom.
Memory – AI systems also require enormous amounts of DRAM, HBM, and other memory. So, memory manufacturers are supplying another critical component of the computing infrastructure needed to scale AI.
This is a bottleneck we’ve recently discussed here at Smart Money.
In all, the AI Revolution has created an enormous number of potential investment opportunities. But the more this technology spreads, the harder it becomes to know which companies deserve your attention – and, just as importantly, which don’t.
Separate the Best From the Rest
There are now so many ways to invest in AI that simply finding an AI stock isn’t enough. The challenge is separating the best opportunities from the rest.
That’s why my InvestorPlace colleagues Louis Navellier, Luke Lango and I have gone back through our AI research and narrowed our recommendations into a newly rebuilt portfolio, the AI Revolution Portfolio.
We first launched this portfolio back in 2023 to narrow the huge universe of AI-related companies down to what we considered the best-in-class opportunities. By combining our different investing strengths, we designed a portfolio that captures multiple parts of the AI ecosystem, rather than betting everything on one company.
And we’ve rebalanced it at pivotal moments in the AI Revolution. For instance, in 2024, AI developers were reaching the limits of brute-force improvements, creating a divide between companies that could adapt and those that couldn’t. So, in December of that year, we rebalanced our AI Revolution Portfolio to make sure we were positioned on the right side of that divide.
Since that rebalance in December 2024, our portfolio has risen 58% – more than double the Nasdaq Composite’s 25% return and nearly triple the Dow Jones Industrial Average’s 19% gain.
Now, we’re at another pivotal moment, where a single AI bottleneck could create opportunities across multiple industries.
We’ll be hosting a special event next Wednesday, August 19, at 10 a.m. Eastern to unveil our new portfolio and show you exactly how we are positioning for AI’s next phase. Click here to reserve your spot now.
In other words, we’ve rebuilt it. Now, all that’s left is for you to come.
Simply click here to join us. We look forward to seeing you there.
Regards,
Eric Fry
