The artificial intelligence boom has mostly been a story about semiconductors. But a new note from Wedbush Securities suggests investors might be looking in the wrong place.
Behind the surge in AI demand lies a more basic constraint: electricity. That's where the Dan Ives Wedbush AI Revolution ETF (IVES) comes in.
The fund is built around Wedbush's "Power 30" theme, offering exposure not to chipmakers but to the infrastructure enabling AI — utilities, grid equipment makers, data center operators, and nuclear energy firms.
The timing makes sense. Hyperscalers are expected to spend $725 billion on AI infrastructure in 2026, up 77% year-over-year, with demand still outpacing expectations.
From Silicon to Electricity
Wedbush's latest industry update shows AI demand is translating into real earnings momentum across power-linked sectors. Every company in the Power 30 that has reported either beat expectations or raised guidance.
Examples are piling up:
- GE Vernova (GEV) booked $2.4 billion in data center electrification orders in a single quarter.
- Bloom Energy (BE) posted a 39% revenue beat and a 255% EPS surprise.
- Southern Company reported 42% growth in data center electricity demand.
Together, they point to a shift: the AI trade is moving beyond chips to the physical systems powering them.
Policy Tailwinds Strengthen the Case
The thesis is also getting support from policy and regulation. Recent U.S. actions, including nuclear licensing reforms and using the Defense Production Act to boost grid equipment manufacturing, are directly addressing power supply bottlenecks. At the same time, major tech firms have committed to self-funding power infrastructure, effectively locking in long-term demand.
Why IVES Stands Apart
Unlike traditional AI ETFs that are heavily concentrated in semiconductors, IVES targets a broader, less crowded part of the value chain. Its holdings span regulated utilities, grid infrastructure providers, and energy producers — sectors that benefit from long-term contracts, pricing power, and structural supply constraints.
In other words, while much of the market chased AI's computing layer, IVES is positioned around its most critical input. The next phase of the AI trade may not be about faster chips, but about who can keep the lights on.
