The artificial intelligence boom is fueling one of the biggest infrastructure booms in modern history, with data center growth at the heart of the story. 

As cloud computing, AI training models, and high-performance computing demand more power and storage capacity, thousands of new data centers are being planned and constructed across the United States and around the world. 

In fact, thanks to the unstoppable AI boom, there are about 4,000 operational data centers in the U.S. right now. An additional 1,500 to 3,000 are being planned or under construction. According to Pew Research, the South has 754 planned data centers. The Midwest has 419 planned. The West has 277 planned, and the Northeast has about 106 planned. Globally, there are about 10,807. 

While investors have largely focused on AI leaders such as Nvidia, AMD, Micron, and Sandisk, another company is emerging as another way to profit from the trend. Generac Holdings (NYSE: GNRC), best known for its backup power solutions, is rapidly expanding its presence in the fast-growing data center market, positioning itself to benefit from the massive surge in AI-driven infrastructure spending.

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Generac Holdings Could Race to Higher Highs

The company raise sales growth, EBITDA, and its margin outlook for the year thanks to data centers, with President and CEO, Aaron Jagdfeld noting, “We are continuing to build momentum in the large and rapidly growing data center end market as we are in the final stages of vendor approval with multiple hyperscale customers and have expanded our backlog for these products with both new and existing customers.

Better, GNRC just signed a global supply agreement with a hyper scale data center operator to supply backup power generators for its data center infrastructure. Plus, analysts at Jefferies just upgraded the GNRC stock to a buy rating, with a price target of $329, noting that GNRC is nearing a “moment of truth” in securing major hyper scaler data center contracts tied to the AI infrastructure boom,” as quoted by Seeking Alpha.

Analysts at JPMorgan also has an overweight rating on the stock, noting that, “Gross margin was particularly strong, driven by price-cost realization, and resulting in a solid EPS beat.”

Sincerely,

Ian Cooper