Why the Best Growth Stocks in 2026 Won't Be Chip Makers, They'll Be Power Suppliers

Everyone's chasing NVIDIA $NVDA ( ▼ 0.44% ).

And look, I get it. The GPU narrative has been incredible. But here's the thing about obvious trades: by the time everyone sees them, the easy money is usually gone.

The best growth stocks in 2026? I don't think they'll be chip makers.

They'll be the companies keeping the lights on.

📈 The AI Story Is Now an Energy Story

Let's rewind for a second.

The first wave of AI investing was straightforward: buy the companies making the brains (chips). NVIDIA crushed it. AMD $AMD ( ▲ 1.72% )  rode the wave. Even some smaller semiconductor names got a nice lift.

But we're entering a different phase now.

AI workloads are scaling fast, and they're hungry. Training large language models, running inference at scale, processing millions of queries per second... all of it requires an absurd amount of electricity.

Data centers aren't just getting bigger. They're becoming power plants with servers attached.

And that's where the real opportunity is shifting.

⚡ Data Center Power: The New Bottleneck

Here's a number worth sitting with: AI data centers can consume 10-50x more power per rack than traditional setups.

That's not a typo. The power density is staggering.

So what happens when every major tech company is racing to build AI infrastructure at the same time?

• Grid capacity becomes a constraint

• Power reliability becomes non-negotiable

• Backup generation becomes mission-critical

Downtime at a hyperscale data center isn't just inconvenient, it's devastatingly expensive. We're talking millions of dollars per hour in some cases.

This is why data center power has quietly become one of the most important investment themes of this cycle.

The companies solving this problem? They're the new picks-and-shovels plays.

🔧 Picks-and-Shovels AI Stocks: The Smarter Bet?

You've probably heard the Gold Rush analogy before.

During the 1800s California Gold Rush, most prospectors went broke. But the people selling pickaxes, shovels, and jeans? They made fortunes.

The AI boom is no different.

You don't have to predict which AI model wins. You don't have to guess whether OpenAI or Anthropic or Google $GOOG ( ▼ 0.85% )  comes out on top.

You just have to own the infrastructure everyone needs.

And right now, that infrastructure includes:

• Power transmission and distribution (getting electricity where it needs to go)

• Backup generators (keeping things running when the grid hiccups)

• Renewable energy systems (because big tech wants clean power)

• Electrical components and switchgear (the boring stuff that actually matters)

These aren't flashy. They won't get CNBC segments. But they're essential, and increasingly, they're where the growth is.

🐱 Caterpillar $CAT ( ▼ 0.05% ): The "Boring" AI Winner

Let me give you a concrete example: Caterpillar.

Yes, the yellow bulldozer company.

Most investors bucket CAT as a construction/mining cyclical. And sure, that's part of the business. But there's another segment that doesn't get enough attention: Power Systems.

Caterpillar manufactures:

• Standby generators

• Prime power generators

• Integrated power solutions for mission-critical facilities

Guess who's buying a lot of backup power right now? Data centers.

And here's the stickiness: once a data center operator standardizes on Caterpillar equipment, they're locked into the ecosystem. Installation. Maintenance contracts. Parts. Long-term servicing.

It's recurring revenue attached to infrastructure that literally cannot go offline.

If AI demand keeps rising → data centers keep expanding → they keep buying generators and power systems → Caterpillar benefits.

The company doesn't need to win any AI race. It just needs data centers to keep growing.

That's a cleaner bet than trying to pick the next GPT.

🔌 Other Data Center Stocks Worth Watching

Caterpillar isn't the only name in this space. Here are a few other AI infrastructure stocks benefiting from the power buildout:

MYR Group $MYRG ( ▲ 2.53% ): Designs and builds electrical transmission lines. Between clean energy and AI infrastructure, demand for moving electrons efficiently isn't slowing down. The stock returned 53% in 2025, and analysts see a multi-decade tailwind here.

NextEra Energy $NEXT ( ▲ 4.13% ): The largest clean energy company globally. Big tech wants renewable power for their data centers, and NextEra is positioned to supply it. Over 26 consecutive years of dividend increases doesn't hurt either.

First Solar $FSLR ( ▲ 0.04% ): Solar manufacturer that's essentially sold out through 2026 with a contracted backlog extending to 2030. When your future revenue is already locked in, growth becomes a lot more predictable.

Eaton $ETN ( ▲ 3.09% )  & Vertiv $VRT ( ▲ 2.54% ): Both play in electrical components, power management, and data center cooling. Less sexy than chips, but equally essential.

The theme is consistent: infrastructure that enables AI, rather than AI itself.

📊 Why This Matters for Growth Investing

If you're focused on long term investing, the power infrastructure thesis has a few things going for it:

1. Structural demand, not cyclical hype

AI buildout isn't a one-quarter story. Between training new models, running inference at scale, and the eventual edge computing wave, power demand keeps compounding.

2. Fee-based revenue models

Many infrastructure plays: especially midstream and power services: generate earnings from contracts and maintenance, not commodity prices. That's stability in a volatile market.

3. Less crowded trades

Everyone owns NVIDIA. Not everyone is looking at backup generator companies. When narratives shift, the early movers get the best entries.

4. Real pricing power

When you're the company preventing a $50 million data center outage, you can charge accordingly. Critical infrastructure doesn't get commoditized easily.

⚠️ What Could Go Wrong

I'm not here to pretend this is a risk-free thesis. A few things worth monitoring:

• Macro slowdowns : If a recession hits and capex budgets freeze, data center expansion could pause. Power stocks would feel that.

• Competition : Generators and electrical systems have multiple serious players. Margins could compress if everyone races to supply the same demand.

• Energy transition complexity : Data centers are experimenting with microgrids, on-site renewables, and alternative setups. The power supply chain could evolve in unexpected ways.

• Valuation creep : Some of these names have already re-rated. Buying at elevated multiples increases execution risk.

Still, I'd rather own infrastructure with visible demand than try to guess which AI startup survives the next funding crunch.

🔍 The Bottom Line

The AI trade is evolving.

Phase one was chips. Phase two is power.

Data centers need electricity: reliable, abundant, and backed up. The companies providing that infrastructure are quietly becoming some of the best growth stocks in this cycle.

Caterpillar. NextEra. MYR Group. First Solar. Eaton. Vertiv.

Not a single one will trend on Twitter. But they might be the ones cashing checks while everyone else argues about which LLM is best.

For growth investing in 2026, I'd keep these names on the radar.

The unsexy stuff usually is.

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George