As the AI buildout expands, investors aren't just looking at Nvidia Corp (NVDA). They see opportunities for infrastructure-focused ETFs.
Bank of America estimates the so-called AI data-center systems market could reach $1.7 trillion by 2030. This implies a 45% compound annual growth rate. The bank also expects data-center capacity to double to 200 gigawatts by 2030, supported by roughly $7 trillion in capital investment.
However, power, labor and supply chains determine how quickly the AI buildout progresses, and U.S. data-center demand could leave utilities facing a more than 100-GW generation shortfall through 2030.
That puts First Trust Nasdaq Clean Edge Smart Grid Infrastructure ETF (GRID) at the center of the second-order AI trade. The ETF gained more than 19% year to date, outperforming its infrastructure category's 14.85% return.
GRID Portfolio: A Who's Who of the AI Power Buildout
Quanta Services (PWR), which Jim Cramer calls a "terrific" stock, accounts for 8.68% of the fund. Eaton (ETN) represents 8.45%. Johnson Controls International PLC (JCI), ABB (ABBNY) and Schneider Electric were also among its largest holdings.
For broader exposure, the Global X U.S. Infrastructure Development ETF (PAVE) holds 100 companies across infrastructure-related industries. ETN and PWR are among its top ten largest holdings. The $13.76-billion fund has also gained ground recently, with 2.23% gains over the past five days.
Meanwhile, iShares U.S. Infrastructure ETF (IFRA) provides another route, combining infrastructure enablers with asset owners. Caterpillar Inc (CAT) was its largest holding at 4.31%, followed by PWR at 4.03%.
Caterpillar itself reported a 24% jump in second-quarter revenue to $20.5 billion, with Power & Energy sales rising 17%; the company specifically cited higher sales of power-generation equipment in data-center applications.
AI's next bottleneck may not be computing power — it may be the physical power needed to run it. And that could make infrastructure ETFs an increasingly important way to play the AI super-cycle without betting on a handful of mega-cap technology stocks.
