The Hidden Energy Infrastructure Play Powering the AI Revolution

The AI revolution is no longer a distant promise—it is a present-day reality reshaping global energy demand. Hyperscale data centers, which consume as much electricity as small cities, now require stable, zero-emission power to sustain their operations. Meanwhile, U.S. onshoring initiatives and the nuclear renaissance are accelerating the need for reliable infrastructure. In this landscape, energy infrastructure companies are emerging as unsung heroes, offering a compelling alternative to speculative retail tech stocks like Walgreens (WBA).

The AI-Driven Energy Bottleneck

Hyperscale data centers are projected to consume 11–15% of U.S. electricity by 2030, up from 6–8% today. This surge is driven by AI training, cloud computing, and edge data processing. However, the grid is ill-equipped to handle this load. Grid bottlenecks in AI hotspots like Northern Virginia and Texas have forced companies to seek alternative solutions. Enter energy infrastructure firms that specialize in nuclear, decentralized power, and grid stabilization—sectors poised to outperform speculative retail plays.

Undervalued Energy Infrastructure Gems

1. Constellation Energy (CEG): The Nuclear Powerhouse

As the largest producer of carbon-free electricity in the U.S., CEG operates a 22-gigawatt nuclear fleet and has secured long-term PPAs with Microsoft and Amazon. Its nuclear plants provide the 24/7, zero-emission power that AI centers demand. Despite a P/E of 32.44 (23% below its four-year average), CEG is projected to grow EPS by 17% through 2028. The Inflation Reduction Act (IRA) and $1.2 billion in DOE nuclear grants further bolster its expansion plans.

2. Bloom Energy (BE): Decentralized Power for Grid-Strained AI Hubs

Bloom's solid oxide fuel cells offer rapid deployment and grid resilience, critical for regions like Texas. With a $8.5 billion backlog and hydrogen-ready technology in development, BE's EPS is expected to grow at a 76% CAGR through 2027. While its current P/E is 0.00 due to losses, the company's alignment with AI growth centers and IRA grid incentives make it a high-conviction play.

3. GE Vernova (GEV): Bridging Renewables and AI Demand

GEV's gas turbines and synchronous condensers stabilize grids integrating intermittent renewables. Despite a high P/E of 146.5x, its fair value estimate of $645.99 (vs. current $621.91) suggests undervaluation. The company has already secured $500 million in data center orders for 2025, positioning it as a critical link between renewables and AI's unyielding power needs.

4. BWX Technologies (BWXT): Nuclear Enabler for Onshoring

BWXT designs advanced nuclear components, including small modular reactors (SMRs) and HALEU fuel. With a $12 billion backlog and a P/E of 12.3x (vs. NuScale's 24.1x), BWXT is undervalued relative to its strategic role. A $1.5 billion DOE contract and partnerships with NuScale highlight its importance in the U.S. nuclear renaissance.

5. Talen Energy (TLN): Powering the AI Infrastructure

Talen's 10-year PPA with AWS locks in premium pricing for its nuclear capacity. With AI-driven demand for clean power surging, Talen's focus on long-term contracts and nuclear expansion positions it as a beneficiary of the $1.2 trillion energy infrastructure market by 2028.

Walgreens (WBA): A Speculative Retail Tech Stock in Decline

Walgreens' recent quarterly report underscores the risks of retail tech speculation. The company reported a net loss of $0.20 per share in Q3 2025, down from $0.40 in 2024. While it has repositioned its retail footprint and expanded healthcare services, its retail sales declined 5.3% year-over-year. WBA's reliance on consumer spending and healthcare policy shifts introduces volatility absent in energy infrastructure plays.

Why Energy Infrastructure Outperforms Retail Tech

Energy infrastructure companies benefit from:
- Recurring Revenue Models: Long-term PPAs and regulated environments ensure stable cash flows.
- Policy Tailwinds: The IRA's $369 billion in clean energy incentives and nuclear grants directly boost these firms.
- Inelastic Demand: AI and onshoring create structural energy demand, unlike retail's cyclical nature.

In contrast, WBA's performance is subject to consumer behavior, legal risks (e.g., opioid litigation), and speculative buyouts. While energy infrastructure firms face regulatory and capital risks, their alignment with AI and decarbonization trends offers a more predictable path.

Investment Thesis

The energy infrastructure sector is transitioning from a commodity-driven model to a high-margin, recurring revenue model. Companies like CEG, BE, GEV, BWXT, and TLN are positioned to capture this shift, offering a “toll booth” business model—generating steady returns without needing to develop AI models themselves. With the U.S. nuclear market projected to grow 8% annually through 2035, these firms represent a compelling alternative to speculative retail tech stocks.

For investors seeking stability amid AI-driven energy demand, energy infrastructure is not just a sector—it's the backbone of the digital age.