Beyond Tech: How Infrastructure ETFs are Cashing in on the AI Supercycle

The spotlight of the artificial intelligence (AI) revolution has long belonged to the "brains", the hyperscalers building cloud empires and the chipmakers powering AI algorithms. However, beneath the surface of the AI boom lies a less glamorous yet critical layer of the ecosystem — the physical infrastructure of electrical equipment, high-voltage transmission, and advanced cooling systems that powers the entire system.

As data centers have evolved from standard facilities into power-hungry "AI factories," with a single campus now demanding as much electricity as a medium-sized city, the infrastructure companies building this digital grid have transitioned from boring industrial staples to high-growth tech enablers.

This surging demand, backed by the broader electrification megatrend, is creating a powerful tailwind for the companies that build, connect and manage the electrical grid. Their profitability, and by extension that of exchange-traded funds (ETFs) that hold them, has been supercharged by the AI revolution of late.

This connection between AI’s digital growth and the physical grid supporting it is becoming increasingly prominent with every quarterly report.

The link between infrastructure companies and the AI trade is simple — a data center is useless without a reliable, high-voltage power supply. This direct correlation implies that as AI workloads expand rapidly, demand for the “pick-and-shovel” providers of the digital age will also rise.

The Architects of the Power Supercycle

AI’s infrastructure hinges on companies designing and maintaining the electric arteries of the digital economy. These companies provide the essential hardware and engineering that turn raw grid electricity into the precise, high-voltage energy required by advanced AI servers.

Key players in this space who have seen their backlogs and valuations explode in recent times are:

Vertiv Holdings VRT: It is a specialist company that designs, manufactures, and services critical digital infrastructure technology for data centers. VRT reported a record backlog of $15.0 billion as of the end of the fourth quarter of 2025, representing a massive 109% increase year over year, backed by intense demand for data center power and cooling infrastructure. This robust backlog hike provides significant revenue growth visibility for VRT in the next few years.

Eaton Corporation ETN: This is a diversified power management giant that saw its Electrical Americas data center orders surge approximately 200% year over year in the fourth quarter of 2025.

Quanta Services PWR: It designs, installs, and repairs high-voltage transmission lines, electrical substations and distribution systems. At the end of 2025, the company reported a record backlog of $44 billion, highlighting accelerating demand in its Electric segment, primarily supported by growing demand for data center infrastructural facilities.

GE Vernova GEV: It provides both the hardware and digital infrastructure essential for a stable, intelligent grid. During 2025, GEV received orders worth $59.3 billion, up 34% organically, led by demand for equipment at Power and Electrification segments.

As governments fund grid resilience and corporations race to meet decarbonization targets, these firms sit at the intersection of the industrial and utility sectors — benefiting from both the AI boom and the industry-wide clean energy transition.

The Case for Infrastructure ETFs

For investors, picking individual winners in a rapidly evolving hardware landscape can be risky. This is where thematic ETFs like Infrastructure shine, offering diversified exposure to the entire "digital grid" build-out.

Infrastructure ETFs offer a diversified way to play the "Power Supercycle" without the volatility of single-stock bets. These funds sit at the intersection of Industrials and Utilities, capturing the companies that physically build the grid and those that manage the energy transition.

Against this backdrop, you may consider the following ETFs for your portfolio:

Defiance AI & Power Infrastructure ETF AIPO

This fund, with net assets worth $244 million, offers exposure to 59 innovative companies driving decentralized energy solutions, electrical grid advancements, data center operations, and AI hardware. Its top four holdings include: PWR (9.10%), VRT (8.98%), GEV (8.60%) and ETN (7.58%).

AIPO has soared 26.9% over the past year. The fund charges 59 basis points (bps) as fees.

First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF GRID

This fund, with net assets worth $7.92 billion, offers exposure to 113 companies that are primarily involved in electric grid, electric meters and devices, networks, energy storage and management, and providing software used by the smart grid infrastructure sector. ETN holds the sixth position in this fund, with 7.60% weightage and PWR holds the eighth position with 4.49% weightage.

GRID has surged 42.2% over the past year. The fund charges 56 bps as fees.

iShares U.S. Power Infrastructure ETF POWR

This fund, with net assets worth $129.4 million, offers exposure to 69 U.S. companies involved in power infrastructure across power supply, generation, transmission, distribution and storage. Its top four holdings include: PWR (6.80%), GEV (6.27%), NextEra Energy (6.25%) and ETN (5.59%).

POWR has gained 16.1% over the past year. The fund charges 40 bps as fees.

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Quanta Services, Inc. (PWR): Free Stock Analysis Report

Eaton Corporation, PLC (ETN): Free Stock Analysis Report

iShares U.S. Power Infrastructure ETF (POWR): ETF Research Reports

First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID): ETF Research Reports

Vertiv Holdings Co. (VRT): Free Stock Analysis Report

GE Vernova Inc. (GEV): Free Stock Analysis Report

Defiance AI & Power Infrastructure ETF (AIPO): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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