Now a major driver of the stock market and a major contributor to economic growth is massive investment in artificial intelligence (AI) infrastructure — primarily AI data centers — by so-called hyperscalers.
Hyperscalers are the largest technology companies that borrow and spend hundreds of billions of dollars a year to build AI data centers, including the Big Four: Meta platforms, Microsoft, AmazonAnd letters. There are certainly others, but those four have tripled their capital expenditures (capex) for AI infrastructure over the past five years.
According to McKinsey & Company, companies worldwide spent nearly $1 trillion on data centers last year. It is projected to reach $4 trillion by 2030.
I’d be surprised if that number isn’t revised higher — several times — in the coming months and years. As noted by Apollo in a recent research report, estimates of capital expenditures for data centers have increased manifold over the past year.
Image Source: Getty Images.
If those predictions are even partially true, AI capex will continue to drive economic growth and sustain a bull market for years to come.
I am not trying to predict which of the above four companies will win this arms race. But I believe the construction, maintenance and ongoing scaling of these AI facilities will require substantial inputs. Namely, electricity, memory capacity, copper and some types of electronic components.
So, I’ve come up with a short list of companies that provide those inputs, most of which are already seeing their revenues, profits and stock prices rise due to demand for data center spending. All of these should be great stocks to buy and hold for at least the next five years.
Copper is essential and demand is increasing
First, there is copper. A traditional data center requires 5,000 to 15,000 tons of copper. In contrast to AI data centers, a facility can require up to 50,000 tons of copper, according to the Copper Development Association. As a result, the spot price of the red metal has increased from about $486 a pound a year ago to $656 today. This is a 35% increase.
A great way to play it Global X Copper Miners ETF (COPX 10.62%)It tracks an index of global companies involved in copper exploration, mining and refining. The price has more than doubled from last year.
Global X Funds – Global X Copper Miners ETF
Today’s change
(-10.62%) $-9.58
Current price
$80.64
Key data points
Day limit
$80.51 – $87.06
52 week limit
$41.51 – $99.99
Vol
6.7M
Next is power. Data centers are a major new burden on the power grid and require significant investment to bring more power online. The World Resources Institute estimates that global transmission and distribution infrastructure will need to double by 2050 to accommodate the world’s electricity needs. GE Vernon (GEV 2.93%) A leader in gas and steam turbines for power plants, wind turbines and grid components. This share has increased by 85% over last year.
Today’s change
(-2.93%) $-28.23
Current price
$935.10
Key data points
Market Cap
$251B
Day limit
$921.49 – $952.86
52 week limit
$458.65 – $1181.95
Vol
169K
Average Vol
2.5M
gross margin
20.16%
Dividend yield
0.16%
AI data center demand for memory is insatiable
The third key input is memory. Data centers have an insatiable demand for it. Micron technology (M.U 12.36%) They need to develop dynamic random-access memory (DRAM) and NAND memory, and there is a global supply shortage, which has driven up the prices of DRAM and NAND chips. As a result, the stock has risen more than 900% over the past 52 weeks and recently entered the $1 trillion market cap club.
Sandisk (SNDK 11.17%) Large-scale manufacture of flash memory products for data centers. Its products are typically solid-state drives that “hold” memory so other chips, such as DRAM, can access it. The stock is up more than 650% so far in 2026.
Today’s change
(-11.17%) $-196.55
Current price
$1563.13
Key data points
Market Cap
$231B
Day limit
$1514.82 – $1681.15
52 week limit
$39.44 – $1861.00
Vol
449K
Average Vol
15.8M
gross margin
56.04%
Some other electronic components are also necessary for any data center. Taiyo Yuten (TYOYY 9.76%)A Japanese company, manufacturers multilayer ceramic capacitors (MLCCs), which regulate power flow in electronic devices and are a key component in data centers. A single Nvidia A circuit board may need more than 6,000 MLCCs, and there is currently a global supply shortage of them. Goldman Sachs MLCC demand from AI servers is expected to at least quadruple by 2030, while industry capacity is growing at 10% per year. Taiyo Yuden’s stock price has risen more than 550% in the past year.
Finally, this AI-infrastructure entry is a bonus sixth pick for the portfolio, and is rarely considered an AI-related company. I speak caterpillar (CAT 3.85%)Manufacturer of construction and farm equipment. Every data center construction project requires significant excavation, land clearing and construction equipment, and CAT has the size and scale to handle the new level of demand. This stock has increased by 165% over last year.
Today’s change
(-3.85%) $-36.20
Current price
$904.28
Key data points
Market Cap
$417B
Day limit
$901.50 – $934.03
52 week limit
$353.93 – $946.83
Vol
2.8M
Average Vol
2.5M
gross margin
31.90%
Dividend yield
0.67%
And here you have it. A six-stock AI pick-and-shovel portfolio for the next five years.
#AIrelated #stocks #buy #hold #years #Motley #Fool