Q: Using the baseball analogy in what inning would you say we are in as far as the buildout of data centres? With what's going on in our crazy world, would you say the build out will slow down or speed up over the next year? Finally, what would be your top 3 picks 5i investors should own if wanting to participate in data centre buildout? As always, thanks for your valuable guidance.
5i Research Answer:
We still think this is in the early innings and earlier thanmost think. Data Centers take time to build out so we think the runway is farily long and this makes them hard to 'overbuild'. Meanwhile, it appears almost every AI company is having trouble meeting compute demand. This is all while we would argue that AI usage and adoption is far from mainstream. Some might view this as a 'bear' case, that people are 'still' not adopting AI but the demand trends seem to show adoption is indeed increasing. We think CLS, NVDA, and NBIS are ways to get exposure but will be volatile.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in NVDA, NBIS.