Powering GenAI_ Feedback on Our Note, and Takeaways from Powering Digital Infrastructure Symposium

Summary of Key Points from the Conference Call Industry Overview - The conference call focused on the digital infrastructure and powering GenAI sectors, highlighting the intersection of clean energy, Bitcoin mining, and data center development [9][36][67]. Core Insights and Arguments 1. Power Shortfall: A projected ~36 GW power shortfall for new data center capacity is anticipated through 2028, necessitating solutions such as co-located nuclear power and conversion of crypto sites to AI/HPC data centers [36][57]. 2. Investment Opportunities: Companies like Bloom Energy (BE) are viewed as underappreciated "time to power" solutions, with strong growth prospects due to operational advantages [36][67]. 3. Beneficiaries of GenAI Dynamics: Stocks identified as beneficiaries include: - Bloom Energy (BE) for fuel cells - Bitcoin mining stocks such as Bitdeer Technologies Group (BTDR), Riot Blockchain (RIOT), and Cipher Mining (CIFR), which are trading at low Enterprise Value/watt multiples [36][67][102]. 4. Grid Enhancing Technologies (GETs): Technologies that improve grid efficiency are highlighted, with companies like Siemens, GE Vernova, and ABB being key players [36][67]. 5. Potential Catalysts: Upcoming catalysts include: - Nuclear and natural gas power plant co-location deals - Crypto site repurposing for AI data centers - Off-grid data center strategies involving fuel cells and renewable energy [36][67]. Additional Important Insights 1. Market Sentiment: There is a general consensus among investors regarding a power shortage through 2030, with many exploring various solutions to address this issue [57][68]. 2. European Renewable Companies: European renewable names are not pricing in potential growth from clean power demand driven by AI, with a significant disconnect noted in market valuations [69]. 3. Options Market Analysis: The options market indicates low probabilities for several stocks exceeding Morgan Stanley's price targets, suggesting potential mispricing in the market [79]. Conclusion - The conference call provided a comprehensive overview of the challenges and opportunities within the digital infrastructure and clean energy sectors, emphasizing the critical role of innovative solutions in addressing power shortages and capitalizing on the growth of AI technologies [36][57][68].