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Table of Contents
🔥 Here’s What’s Happening Now
Slight down day for the market but pretty savage when it comes to the momentum names. As I have said before, when this current upswing ends it will start in the high flyers, but it’s also normal for them to sell off from time to time before continuing to move higher. So nothing to see here just yet.
This week’s biggest event will be Powell’s Jackson Hole speech on Friday…..
Anything that hints at something other than 3ish rate cuts this year would probably be bad for the market. I think you always need to be hedged, but would add some more hedges ahead of this.
Bitcoin and Ethereum both made new highs and then sold off. Longer term I still think these are must owns, will see if this is a buyable dip or not. Charts like these are where I prefer to sell premium, I like to short puts (cash secured) but you can also sell calls against your ETFs if you own them…..
🧠 Where The AI Buildout Money Flows Next
After Jackson Hole the most important data point is NVDA earnings next week. I gave some of my thoughts on NVDA below. The key to this market, besides interest rates, is still AI and AI Capex. In many ways whether the hyperscalers can monetize all of the capex is more important than the economic numbers as far as the market is concerned. Jefferies wrote a report on it last week so today we take a deep dive….
Key Takeaways
Demand Still Outstripping Supply: Even with leasing volume in core North American markets falling to 503 MW (lowest since 1Q23), total NA leasing hit ~1.2 GW thanks to strong tertiary market absorption (~700 MW). Hyperscalers remain aggressive, with >9.9 GW of capacity under construction/committed.
CapEx Guidance Keeps Moving Higher: GOOGL (+$10B to $85B), META (FY26 capex +40% YoY to $100B+), MSFT still constrained until Dec ‘25, AMZN steady at $32–33B for Q3/Q4.
Shift Beyond Hyperscalers: DLR, EQIX both posted record enterprise/interconnection results, suggesting demand is broadening into enterprise layer — could be a new growth leg.
Utilities & Power Tie-ins: CEG’s 1.1 GW PPA with META and ETN/NVDA HVDC partnership highlight that power infrastructure players are increasingly direct AI beneficiaries.
Semis & Equipment Still in Expansion Mode: NVDA’s hyperscaler ramp at 1k NVL72s/week with visibility to 10GW+ of projects ($40–50B/GW) reinforces near-term AI buildout tailwinds.
Surprises
Enterprise & Interconnection Strength – The DLR and EQIX numbers show retail/enterprise leasing growth is breaking records. This is important because for much of the AI boom, growth was hyperscaler-led. This could broaden the beneficiary set to smaller-scale interconnection and colocation providers.
Power Deals of Scale – CEG’s 1.1 GW nuclear PPA with META is one of the largest single deals we’ve seen in the AI power space, suggesting utilities with clean/dispatchable capacity are going to have multi-year visibility.
ETN/NVDA HVDC Partnership – Eaton’s jump into high-voltage DC infrastructure with Nvidia is a notable vertical integration move; could make ETN a core AI infra name, not just a diversified industrial.
META’s Aggressive Pipeline – Adding 900 MW of uncommenced leases in a single quarter is massive, showing META is now matching or exceeding MSFT in forward commitment pace.
Implications for Previously Liked Names
No Negative Thesis Changes – For core AI infrastructure names we’ve favored (NVDA, VRT, MOD, BWXT, AMRC, SMCI), the report confirms continued visibility through at least 1H26.
VRT – 1.2x book/bill ratio and broad geographic growth reinforces backlog health.
MOD – Not mentioned directly, but thermal management demand only rises as density increases.
BWXT/AMRC – Indirectly supported via nuclear PPA trend (CEG/META deal shows that nuclear and advanced clean power are becoming mainstream for AI data centers).
New or Strengthened Winners
CEG (Constellation Energy) – The META nuclear deal gives it 1.1 GW of high-margin, long-term contracted revenue. This is a direct AI power play with ESG appeal.
ETN (Eaton) – The NVDA HVDC collaboration positions Eaton as a must-own in AI data center electrical infrastructure.
WCC (Wesco) – +65% DC growth YoY in Q2 shows electrical distributors can be leveraged AI infra beneficiaries — more cyclical, but clearly tied to buildout pace.
DLR/EQIX – The record sub-1 MW leasing/interconnect growth hints at a durable enterprise connectivity uptrend alongside hyperscale.
GOOGL/META/MSFT – As end-customers, their continued capex expansion supports all upstream suppliers.
Nuclear & Dispatchable Energy Utilities – Beyond CEG, regulated utilities with excess capacity in nuclear/natural gas could be surprise winners.
Potential Second-Order Beneficiaries
Transmission & Grid Tech – Companies in HVDC, substations, and grid balancing (ABB, Siemens Energy) stand to gain as power constraints force grid upgrades.
Cooling & Power Storage – Extended demand for immersion cooling, advanced UPS systems, and battery storage could push niche providers higher.
Emerging Market DC Developers – The shift to tertiary markets (700 MW absorption) could mean faster growth for operators in secondary/overlooked geographies.
Bottom Line
The Jefferies update reinforces the AI/data center build thesis through at least 2026, but adds two critical nuances:
Enterprise/retail colocation is accelerating — widening the pool of beneficiaries.
Power and grid partnerships are now core to AI scaling — names like CEG and ETN deserve more attention alongside VRT, MOD, and BWXT.
If anything, this strengthens the case for a barbell approach:
Core hyperscaler-exposed infra suppliers (VRT, MOD, NVDA, SMCI)
Clean power & grid infra leaders (CEG, ETN, BWXT)
Selective data center REITs with enterprise/interconnection momentum (EQIX, DLR)
First-Order Plays
These are direct beneficiaries of the AI/data center capex wave, hyperscaler leasing, and power infrastructure demand mentioned in the Jefferies report.
Ticker
Company
Why It’s First-Order
NVDA
Nvidia
Hyperscalers ramping NVL72s at 1k/week, line of sight to 10GW+ projects. Core AI compute supplier.
VRT
Vertiv
Orders +11%, book/bill 1.2x. Power & thermal systems for AI-driven data center builds.
ETN
Eaton
DC revenues +50%, orders +55%. Partnering with NVDA on HVDC power infrastructure.
WCC
Wesco
Electrical distributor with 65% DC revenue growth in Q2.
DLR
Digital Realty
Record-high sub-1MW leases and interconnect revenue — broadening demand beyond hyperscalers.
EQIX
Equinix
Added 6.2k interconnects, first time interconnect revenue topped $400M in a quarter.
CEG
Constellation Energy
1.1 GW nuclear PPA with META — stable baseload for AI workloads.
GOOGL, META, MSFT, AMZN
Hyperscalers
Driving the demand cycle; capex plans still expanding, major lease backlogs.
ORCL
Oracle
Committed to 131k MI355X GPUs, growing DC footprint.
Second-Order Plays
These benefit indirectly from AI data center buildout — via supply chains, component demand, or thematic adjacency.
Ticker
Company
Why It’s Second-Order
MOD
Modine Manufacturing
Thermal management systems for data centers, an enabler for AI workloads.
BWXT
BWX Technologies
Nuclear reactor components; leverages rising demand for AI-grade baseload power.
AMRC
Ameresco
Renewable + hybrid power systems for data centers.
PLTR
Palantir
AI orchestration and analytics — benefits from expanded compute capacity.
SNOW
Snowflake
Data infrastructure layer for AI-driven analytics.
MPWR
Monolithic Power Systems
High-voltage DC/DC conversion chips critical for AI servers.
TSLA (Energy segment)
Tesla
Potential beneficiary in large-scale battery energy storage for DC reliability.
NEE, DUK
Utilities with AI/DC exposure
Possible long-term winners from hyperscaler PPAs.
Implications & Surprises
Surprise: Despite talk of “AI digestion,” hyperscalers are still adding lease backlogs (META +900 MW this quarter).
Power bottlenecks remain the gating factor, meaning companies in nuclear (CEG, BWXT), HVDC (ETN), and cooling (VRT, MOD) should see sustained demand.
The shift to tertiary markets is real — this could open the door for regional power producers and smaller DC developers to enter the winner’s list.
Retail leasing growth at DLR and EQIX suggests the AI buildout is moving into the enterprise layer — potentially boosting service providers and software enablers.
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📈 Stock Corner
Today’s stock is Lululemon (LULU)…..
One of the things I use social media for is to point out situations I am not aware of. Retailers are certainly an area that is typically not on my radar screen but a lot of bullish chatter on this one from some smart accounts. Also much more my style to buy something on an undercut and rally at the 10 day off of a major selloff than to buy something making new highs.
📬 In Case You Missed It
.@TuttleCapital sees $NVDA as a strong long-term hold but warns against trading near its high. Expects a "blowout quarter" in August; views dips as "gifts." $AMD and $INTC are good alternatives, with Intel getting U.S. government attention. @TomWhite_S suggests options trades.
— #Schwab Network (#@SchwabNetwork)
6:00 PM • Aug 15, 2025
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