AI’s Growing Power Needs Are Shifting the Opportunity Toward Equipment Makers
The AI power boom was supposed to be a slam dunk for power generators, but the grid has other plans. Once seen as the obvious winners of the data center boom, power producers are getting hit by regulatory headwinds, while companies building and equipping new generation capacity are having a blockbuster year. That shift is creating another opportunity in the equipment keeping power flowing.
Rotation in motion: The stock performance gap between power generators and equipment makers has widened sharply in 2026. Power producers entered the year with a strong setup, thanks to surging electricity demand, limited new supply, and higher prices that could lift profits without requiring major investment. But regulatory changes in two of America’s biggest power markets are now putting that advantage under pressure.
- Constellation Energy, Vistra, and NRG Energy are down in double digits this year, while GE Vernova and Caterpillar are up over 45%.
- Texas halted fast-tracked data center grid connections, while PJM reworked its capacity auctions after failing to attract enough power supply for mid-2028.
The Build-Out Is Hitting a Wall of Its Own
Even if regulatory clarity arrives, the physical reality of building data centers is becoming more challenging. AI companies have announced plans for ~4K new facilities, but the actual build-out is running into serious delays. About 60% of data center capacity planned for completion in 2027 hasn't even broken ground yet, according to JPMorgan.
- The US needs 500K electricians, 300K welders, and 550K plumbers to meet data center buildout targets, with much of the skilled labor located far from planned projects.
- Goldman Sachs estimates only ~50% of AI computing capacity planned through 2028 will come online on time, down from a historical rate of ~72%.
Power reset: The momentum is increasingly shifting toward building new power capacity, both on and off the grid. Existing generators could still benefit as data center demand ramps up, with Constellation Energy’s CEO pointing to potential contracts ahead. But with co-location rules at PJM not expected until mid-2027, existing plant owners face a long stretch of uncertainty before the thesis clears.