Nvidia Is Expensive. Here Are 3 High-Yield Artificial Intelligence Plays That Aren't.

Group 1: Nvidia and AI Megatrend - Nvidia has significantly benefited from the AI megatrend, providing essential computing power through its semiconductors, which has led to increased profits and valuation [1] - Despite a recent stock decline of over 30%, Nvidia's valuation remains high at nearly 35 times earnings, compared to the S&P 500's 21 times earnings [1] Group 2: Alternative AI Investments - For value-conscious investors, companies like Dominion Energy, NextEra Energy, and Brookfield Infrastructure present cheaper investment opportunities in the AI sector [2] Group 3: Dominion Energy - Dominion Energy is positioned to benefit from the AI demand surge, particularly in Northern Virginia, where its data center market is expanding [3][5] - The company is working towards a stronger balance sheet and aims for 5% to 7% earnings growth, with potential dividend growth tracking earnings [4] - The demand for power from data centers in Virginia has increased by 88% from July to December 2024, likely leading to regulatory approval for capital spending [5] Group 4: NextEra Energy - NextEra Energy is expected to see significant growth due to AI-driven demand for electricity, with data centers projected to account for nearly 50% of U.S. electricity demand growth by 2030 [6] - The company plans to develop 36.5 GW to 46.5 GW of new renewable capacity by 2027, which is expected to drive adjusted earnings per share growth of 6% to 8% [8] - NextEra Energy is also integrating AI into its operations, enhancing efficiency in land analysis and supporting data center demand through natural gas power solutions [9][10] Group 5: Brookfield Infrastructure - Brookfield Infrastructure operates a diverse portfolio that includes utilities, energy midstream, and data infrastructure, with over 60% of its funds from operations expected to benefit from AI [12] - The company is investing in data centers and semiconductor fabrication facilities, which are crucial for supporting AI technology [13] - Brookfield estimates a need for over $8 trillion in AI infrastructure investment over the next three years, positioning itself to capitalize on this opportunity [15] - The company trades at around 11 times its funds from operations, which is considered low given its expected growth rate of over 10% per year, and offers an attractive dividend yield of nearly 5% [16]