Powering the AI Revolution: 2 Unexpected ASX 200 Stocks to Watch
Image Credit: Fré Sonneveld | Unsplash
Investors interested in capitalizing on the artificial intelligence revolution should consider looking beyond traditional tech stocks. Surprisingly, energy providers like AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG) are emerging as crucial players in supporting the AI infrastructure due to their significant role in powering AI data centers.
Why Energy Stocks? AI's Insatiable Power Demand
As AI technology evolves, the need for robust data centers increases. These centers require immense amounts of power to handle the extensive processing AI demands. NextDC CEO Craig Scroggie highlighted that their upcoming high-performance computing facilities would consume ten times the energy of their current operations, illustrating the vast energy requirements of modern AI applications.
The Global Impact on Energy Consumption
This trend is not limited to Australia. Globally, data centers are experiencing a surge in power demand, driven by the deployment of AI technologies. Manju Naglapur of Unisys Corp noted that the power demand for data centers has skyrocketed following the AI hype. Similarly, in the United States, the narrative around AI is increasingly focusing on its potential to drive significant growth in the utilities sector.
ASX Stocks to Consider
AGL Energy and Origin Energy, both part of the ASX 200, are ideally positioned to benefit from this increased demand. Over the past year, these stocks have not only shown robust performance but also offer attractive dividend yields, with AGL at a 5.1% fully franked trailing dividend yield and Origin Energy at 4.9%.
Future Growth Prospects
The massive expected increase in energy consumption by AI data centers presents a substantial growth opportunity for these utility stocks. As AI continues to integrate into various sectors, the demand for power will only escalate, potentially leading to further gains in share prices and dividends for companies like AGL and Origin Energy.
Source: The Motley Fool
