Unless you’ve been living under a rock, you’re already aware that power demand is expected to explode as more and more data centers come online. But exactly which names are the so-called “smart money” investing in?
Hedge funds are referred to as “the smart money” for a multitude of reasons, including the fact that they invest where the opportunities and action are, and AI infrastructure and energy generation have both in spades.
Increasing power demand drives power grid expansion
As most are aware, growing power demand is a direct result of more data centers coming online. According to Goldman Sachs Research, demand from data centers is projected to accelerate 175% from 2023 levels by 2030, effectively bringing the equivalent of another top-10 power-consuming nation onto the grid. To put that scale into perspective: if every standard Google search were upgraded to an LLM search today, it would consume 29.3 TWh of electricity, the same amount Ireland uses in an entire year."
Backing all this growing power demand are concerns about the need for unprecedented growth in power grid capacity. Indeed, if the grid is going to support as much increased data-center demand as Goldman Sachs is forecasting, our grid is going to need much more capacity than it has now. Princeton projects that the transmission system will have to grow by 60% by 2030, according to McKinsey.
Herein lies some major investment opportunities that numerous hedge funds are taking advantage of. McKinsey estimates that companies will have to spend $5.2 trillion expanding infrastructure for artificial intelligence by 2030, and hedge funds are taking a piece of the action, with some funds picking up multiple “pick-and-shovel” plays for the AI and data center boom. Let’s take a look.
Here are some of hedge funds’ favorite AI infrastructure stocks
Based on 13F filings for Q3 2025, Renaissance Technologies owns many AI infrastructure stocks. Although it sold about 1.8 million shares of NVIDIA during the third quarter, the chipmaker remains the number two spot in the firm’s portfolio. Renaissance also owned GE Vernova, considered a major beneficiary of AI because of the vast amount of electricity they require, which feeds right into the company’s grid infrastructure and power generation equipment. IonQ is also in Renaissance Technology’s portfolio. The company is speculated to be a pick-and-shovel play via its quantum computing technology. Other AI infrastructure stock plays include Pure Storage and Taiwan Semiconductor.
Millennium Management owns data center REIT Digital Realty Trust and chipmakers TSM, Broadcom, and NVIDIA, while Citadel Advisors owns chipmakers Broadcom and NVIDIA and Palo Alto Networks.
Point72 Asset Management holds shares of Arista Networks, chipmakers Broadcom, AMD, Tower Semiconductor, NVIDIA, and ASML, Credo Technology, which provides active electrical cables and other high-speed connectivity needs, Confluent, and Zebra Technologies.
Two-Sigma Investments owns data center giant Equinix, chipmakers AMD, Qualcomm, NVIDIA, and Micron, and Astera Labs, which has expertise in high-speed connectivity solutions. Two Sigma also owns IREN, which has repurposed its data center infrastructure from bitcoin to AI. Other holdings include Lam Research, which provides the equipment chipmakers need to manufacture AI semiconductors, and Credo Technology.
Tapping energy and utility names for AI exposure
Investors will also see numerous utility and energy names on hedge funds’ ownership lists, specifically, those that should benefit from the AI boom.
For example, Elliott Management, Citadel, Appaloosa, Dan Loeb’s Third Point, and the Duquesne Family Office all own nuclear and natural gas plant owner Vistra. Susquehanna International and Two Sigma are among those that own NRG Energy, as are Lyrical Asset Management, TimesSquare Capital Management, and Point72 Asset Management and Point72 Asia.
Constellation Energy is also a hot name among hedge funds, owned by the likes of Tiger Global and Coatue Management, among many others. Among the funds that own Talen Energy are Lone Pine Capital, Oaktree Capital Management, Two Sigma Investments, Corsair Capital Management, Man Group, Gotham Asset Management, Castleknight Management, William Blair Investment Management, and Moore Capital Management.
Buying alongside hedge funds
As more and more data centers come online, power demand is just going to keep growing.With power demand from data centers expected to explode through 2030, we can also expect unprecedented power grid capacity growth. As such, it makes sense that so many hedge funds are tapping into this trend.
When investing with the smart money, investors typically see greater returns on their investment portfolios because they’re holding the same names as the market’s giants. However, there’s always risk, no matter what you buy, so investors are always advised to proceed with caution.
