Top 3 AI Data Center Stocks to Buy Now in 2026 — Infrastructure Power Cooling Layers

[00:00:00] Speaker 1: Jason, I continue to be amazed at how big the AI data center boom really is. It's not a 2026 story, it's multi-years. Last week, we discussed the AI data center layers, the whole ecosystem. This week, we're going to be talking about layers one, two, and three and talking about three amazing stocks. Before we get into those opportunities, why don't you break down the layers in the ecosystem for us? [00:00:25] Speaker 2: Sure. As you mentioned last week, we talked about actually layers four and five. If you look at AI as its own sort of frontier pushing forward, we got five very key areas here. Last week, we talked about compute networking and optics and photonics and all that cool stuff. These are the less sexy ones, but let's get into layer one because you can't have AI without a campus to hold it. AI is not just software anymore. It's not just semis, it's becoming this whole multi-sector build-out. And investing in technology, it just kind of misses the point. Let's go back to our human waves of innovation. We had the industrial revolution, mechanized labor, right? We had transportation, it collapsed distances, communication allowed us to connect the globe and the internet, digitize the whole economy. But now AI is industrializing intelligence itself. We went over those layers. Now we're talking about layer one. This is land and construction. Before AI even answers its first prompt, it's got to live somewhere that requires concrete, steel, copper, underground utilities, roads, a whole physical hyperscale campus. Now, Luke, I don't know if you know this, but some hyperscale AI campuses span millions of square feet and they require enough concrete to build multiple skyscrapers, multiple skyscrapers. The cloud used to feel like this open weightless entity. Now it's gotten real heavy again with concrete truck deliveries. If we move on to layer two, you got to power up the whole thing, right? AI, it consumes a massive amount of electricity. You got substations, you got transformers, you got switchgear, you got backup generation power. It's all got to be clean and efficient power. It's got its own grid and it's expanding the actual grid that we're all relying on. I read the other day, some AI campuses consume as much electricity as an entire city. So the utilities grid themselves are beginning to rethink their long-term grid expansion process because AI is moving faster than anybody expected. Lastly, we need cooling and we need water and we need a lot of it. AI chips generate an immense amount of heat. Air cooling just isn't cutting it anymore. You need liquid cooling. The average house uses about 300 gallons of water per day. We're seeing some data centers consume 3 million gallons of water a day. That's enough to supply water to 10,000 homes per day. Wow. It's a massive, massive build out and the future of AI might partly depend on plumbing, which is why we're seeing such a boom in the trades these days. [00:03:15] Speaker 1: I love that. I just think that people don't realize just how vast everything is. As we cover each of the layers, let's just get into great stocks. A couple of these we have never discussed on this channel. So I'm excited about that. Number one, we're going to be talking about Sterling Infrastructure. This is ticker STRL. This was one of the sexiest beat and raises this earnings season. This company for Q1, they had revenues of 825.7 million. This is versus the street estimate of 603.6 million. That's a huge, huge beat. EPS was huge. But their full year guidance is what kind of like got me excited. Their EPS was $18.72.5 cents at the mid. And this is versus $13.73 for the estimate. Now, if you look at this chart, this is looking at the sales estimates by analysts for 26, 27 and 28. Here you can see where we started a year ago at 2.35 billion. It's going to be $3.78 billion for full year 2026. It goes to nearly $4.5 billion the next year. And then in 2028, $5.62 billion. Seven analysts recently raised their sales estimate for this company. EPS growth for one year is 24%. What are the key themes here? E-infrastructure, data centers, semiconductor projects. It's got a forward PE of 41.6 and a market value of 26 billion. This is one of those mid cap names that are really doing well. [00:04:56] Speaker 2: That chart looks constructive to me. By the way, Sterling sits right in layer one, construction and physical build out. You like what I did there? This is prepping the sites. This is underground utilities, roads, foundations. It's building the actual campus. If you want to build an AI data center, turnkey, you call Sterling. That's why this company is booming so much. And guess what? An AI data center doesn't just appear out of thin air. Somebody's physically got to build the backbone. And hyperscalers are aggressively expanding all their AI campuses. So more AI demand, it means more physical construction. That's more business for Sterling. Data center demand is driving backlog and infrastructure demand. Revenue growth is tied to the whole e-infrastructure segment. So before a data center even exists, somebody's got to lay the concrete foundation. [00:05:50] Speaker 1: Speaking of demand, what we like to do is look at the money flows demand, which by the way, if you like this content, make sure to like and subscribe to our YouTube channel. It really helps us out. Here we're at our portal. We can see that Sterling STRL has a map score of 81, one of the best in the business. And then over here, we could just see the stairway to heaven. Money flows continue to be piling into this stock. Really even starting last year when this was a 200 and change stock. Thing blew all the way up almost near $900. There is a little bit of a pullback recently with most stocks. You come over here, we can see these blue lines, stairway to heaven. Those are elite outlier signals telling you Sterling, one of the few stocks that command one of the highest grades in all of our data. So this is a tremendous, tremendous name in AI data centers. Yeah. [00:06:46] Speaker 2: And that chart, you just showed 10 outlier 20 appearances in our outlier 20 at money flows in the past year alone. That is rare. And those green signals, when they're matched with superior fundamentals, that is a great combination. That's what we look for. [00:07:03] Speaker 1: The number two stock that we're going to be talking about is Invent Electric, ticker NVT. Now I want to spend a couple of seconds telling you about this. Q1 earnings, eye-opener, shocking. Broad-based growth on all verticals, okay? Infrastructure, data centers, cooling, significant outperformance. That's what they were talking about. Q1 revs, beat and raise. Q2, their rev growth guide was plus 29% at the midpoint. That's versus 18.2 of analyst. EPS guide of $1.13.5 cents, well above the $1.07 estimates by analysts. They also raised their full year. But if you look here at the EPS estimate trends, we're investors, right? We are investing in companies so that we can get a share of their earnings in the future. Well, look at what the future looks like for Invent. Here we can see that this time last year, EPS for 2026 was $3.50 estimate. It's already up 31% to $4.57. Go out another year, it's going to ramp to $5.58 and then it's going to go up to $6.50. And if you see these trends, there's a good chance that they're going to continue to go higher and higher. 13 analysts recently raised their EPS estimates for this company. Margins continue to expand. Forward PE is not that crazy for a high growth company, 34.2. Market value in that mid cap range, $27.3 billion. Electrifying. [00:08:41] Speaker 2: I mean, who sees growth metrics like that for an electrical infrastructure company? And that's right where Invent sits, right in our layer two of our three layers. They do electrification, electrical protection, power distribution, thermal management. It also straddles our third layer cooling. It handles the enclosures, the infrastructure systems. So AI data centers are becoming a giant electrical system. And power density is rising dramatically. So companies like Invent help handle that. These AI racks are requiring more and more power management distribution systems. The complexity of electricity is rising with these denser clusters. And utilities are needing to upgrade existing infrastructure as well as infrastructure at the data center site. So this is a huge secular tailwind from electrification just for AI expansion alone. As AI scales, electricity management becomes even more and more mission critical. [00:09:46] Speaker 1: This stock, if I could say it was on a mission, it really is. And it is northbound. So we can see this is a map score of 82.8. I want to just show you something beautiful. Look at all of the green signals. Now, these are discrete inflows each day where we see money going into stocks. It means volumes are accelerating. The price is going up. It looks like a sloppy trade as someone is getting into this share. Only one time was there a sell signal in this company. Look what happened thereafter of that sell signal. It marked the low, didn't it? So I feel bad for whoever sold that. And then finally, it continued to go higher and higher. Stairway to heaven formation over here. It's qualified. It is a top tier company that we have been showcasing in our research. This has been just one of those names. It's not on a lot of people's radar, but it definitely fits into the AI data center ecosystem. [00:10:43] Speaker 2: Absolutely. Now, here's the thing about layers one through three. They're less sexy. Like I said, they're less appealing. We're talking construction. We're talking electrification. But when you're investing in AI, you're not just investing in the tech sector, right? Chips and memory. You're investing in a whole multi-sector layer. This is a frontier, a big push forward. Electrification, construction, and next up, our third layer, cooling. This is all part of it. Not as exciting, but super essential. [00:11:13] Speaker 1: Well, I like to get cool. And one way to play the cool theme is Vertive Holdings, ticker VRT. We've known about this name a long time. They had a really good earnings report, Q1, where they came out $1.17 versus a dollar estimates. They did beat their full year guide. It wasn't a huge magnitude beat, but the customers, they were saying they're prioritizing optimized design, and that is helping them with market share gains. So Wall Street's been really, really excited about this company. Here I've got the EPS estimate trend for, you know, 26 through 2028. All you need to know is that the numbers continue to go higher and higher. So for 2026, $6.43. That is going to expand in 2027 to $8.65. And then we're almost at 11 bucks per share if you go all the way out to 2028. So again, when you are looking for top tier companies, don't focus on non-profitable companies. Focus on those that are gushing earnings and they continue to have this buildup year after year. That's what the smartest investors are looking for. 24 analysts raised EPS recently. That's a lot for a company of this size. You're talking about a market value of $142 billion. Forward PE, it's not cheap. 51.1. Margin is improving. What are the themes? Data centers, cooling, one core, smart run. This is a great, great company. [00:12:42] Speaker 2: When earnings are slated to nearly double in two years, just ask yourself if 51 PE is expensive because if they come out, beat and raise, those numbers are going to skyrocket and the PE is going to fall. Now, this company is cool on so many levels, but really it sits kind of firmly between layers two and three, but we're going to focus on cooling because that's what it does. It handles also these critical power systems and backup systems. But really what I want to focus on is their thermal management. These AI data centers are turning out huge heat, huge. We got to cool them. Vertiv does liquid cooling infrastructure. It's one of the clearest picks and shovels of AI infrastructure. AI is not going to work if it overheats and all the GPUs are fried. [00:13:33] Speaker 1: I mean, if we want to look at a cool chart, we do need to look at all of the flows here for VRT. Here you can see a map score of 81, which is just top tier. And again, the company is just riding a wave of money flows. And this trade data centers, they have been in play for well over a year. That's why we're seeing all of this buy flow that has been happening over the past year. There's nothing we can do about it. It's one of the biggest themes out there. And then you can just see that this was a top tier stock. A little volatile, but you just see a lot of occurrences on our outlier 20 report. I want to thank everybody for tuning into our channel. And if you really liked this episode, chances are you're going to like last week where we talked about layers four and five of the AI data center. So make sure to check that out. And for next week, we're going to be diving a little bit deeper into photonics, talking about some of the segments inside of that. That is going to come out on Thursday at 9:00 a.m. Eastern. So make sure to stay tuned. Like and subscribe to our YouTube channel if you like this content. And we will see you next time.