Got $5,000? 2 Stocks Supplying the AI Data Center Power Crunch.

Source Motley_fool

Key Points

  • Vistra is seeing profits soar, as power demand hits record highs across the mid-Atlantic, Midwest, and Texas markets.

  • GE Vernova's $176 billion backlog and high-margin services revenue from gas turbines could fuel excellent returns.

  • Motley Fool Issues Rare "Total Conviction" Buy Alert ›

If you have some extra money to invest right now, buying shares in the companies that supply power to data centers is an attractive opportunity. McKinsey's Global Energy Perspective 2026 report projects that data center electricity demand could grow at a 24% annual rate through 2030, with power supply lagging IT compute demand.

Vistra (NYSE: VST) and GE Vernova (NYSE: GEV) are two stocks positioned to help close that gap through power generation and equipment.

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Vistra

Vistra generates power from natural gas, nuclear, coal, and solar plants and sells it through brands including TXU Energy. In the second quarter of 2026, adjusted operating profit grew to nearly $1.8 billion, up more than 30% year over year. The stock's 19% decline over the past year presents a compelling buying opportunity against this momentum.

Power demand continues to soar, and data centers are not the only driver. In July, two of the biggest U.S. power grids -- the PJM Interconnection (covering much of the mid-Atlantic and Midwest) and the Electric Reliability Council of Texas (ERCOT) -- set new records for electricity demand, with PJM topping 168 gigawatts and ERCOT topping 91 gigawatts. A large portion of the growing demand is coming from factories, electric vehicles, and population growth.

Management expects annual load -- the amount of electricity used on the grid -- to grow by at least 4% to 6% in ERCOT and by 2% to 3% in PJM through 2030, driven by industrial reshoring, electrification, population growth, and data centers.

Power prices can fluctuate, which can negatively impact Vistra's financial results. The stock also trades at a high valuation of 27 times trailing earnings, but, given long-term power demand trends, Wall Street still expects earnings to grow at a robust 34% annual rate over the next several years. This stock could still deliver market-beating gains through the end of the decade.

GE Vernova

GE Vernova makes HA-class gas turbines, transformers, and switchgear through Prolec GE, as well as wind turbines. Its total backlog reached $176 billion in Q2 2026, and it is on track to reach $200 billion in 2027. It reports results across power, electrification, and wind segments. Data center orders in electrification topped $5 billion in the first half of 2026, more than double full-year 2025.

Management expects to end 2026 with at least 125 gigawatts under contract in its gas power business. More than half of the gigawatts under contract are for the company's largest, most efficient HA turbines. During the Sept. 16, 2026, Morgan Stanley conference, CEO Scott Strazik said that every gigawatt of these HA turbines will generate about $500 million of high-margin services revenue over the first 20 years.

Execution risk on the large backlog and recent softness in its wind segment are potential headwinds that could slow momentum. The stock's 29 price-to-earnings multiple prices in a lot of growth, but analysts project roughly 36% annual earnings growth over the next several years. That's enough growth to potentially double or triple a new investment today over the next five years.

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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Vernova and Vistra. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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