December 4, 2024
Profit from AI's Construction Boom
Dear Subscriber,
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| By Sean Brodrick |
Some of the babbling heads on TV say the AI boom has peaked. Not a chance!
In fact, not only is AI the spark for a new tech supercycle. It’s also providing a lift to unlikely parts of the economy.
Take construction, for instance …
There’s a construction boom going on in this country, and it has everything to do with artificial intelligence.
This week, new data on U.S. manufacturing construction came out.
Not only did it hold near record highs, but more and more of it is driven by electronic and electrical manufacturing construction, thanks to the CHIPS Act & Inflation Reduction Act.
Sure, a lot of that is new semiconductor factories and whatnot. But a big part of it is the construction of new U.S. data centers.
These centers, being built to handle the tremendous demand from artificial intelligence, saw construction rise to a record high this month of annualized $30 billion a year.
That's up 37% from last year and 131% from just before the release of ChatGPT two years ago.
And it’s not just government subsidies fueling this boom …
Private U.S. companies are plowing so much money into data centers that it now leads ALL other categories of industrial construction.
Data center investment has doubled since 2022. And it now attracts more cash than construction of theme parks, shopping centers, hospitals, schools and even hotels.
That’s just in America. Globally, investment in data centers is on track to reach $250 billion a year according to money manager KKR.
Well, surely this marks the peak, right? Nope, and to quote one of my favorite movies, “Stop calling me Shirley!”
This trend is nowhere near over. According to an August estimate by Precedence Research, the AI market should continue to grow at a compound annualized growth rate of 19.1%.
The global AI market was worth $538.13 billion in 2023, which rose to $638.23 billion this year and it should reach around $3,680.47 billion — or $3.68 trillion — by 2034.
So, how can you play this?
You could buy industrial construction stocks. But those have been weighed down recently by other factors pushing around the construction business.
Or you could buy individual stocks leveraged to the AI/Tech supercycle.
You can find many of them in the Global X Artificial Intelligence & Technology ETF (AIQ). It has a Weiss Rating of “C” and an expense ratio of 0.68%.
Funny enough, I recommended AIQ when I wrote about AI at the end of 2023. If you’d bought it then, you’d be up about 28%! Not bad … I think 2025 is going to be even better!
You can see AIQ is breaking out and making higher highs. This next year could be transformative for AI and tech …
And this could be a very profitable stocking stuffer if you buy it now.
All the best,
Sean
P.S. Of course, if you want to drill down into specific plays set to take advantage of this massive buildout, I know just the way to do that, too.
We recently put together a presentation on the three silent partners AI leader Nvidia is using to stay ahead of the game. I urge you to check that out here.
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