Forget Nvidia: This Other Stock May End Up Being the Most Important Data Center Opportunity of All, and It's Not a Technology Company

When you think about artificial intelligence (AI), things such as self-driving cars and humanoid robots might come to mind. Counterintuitively, it's often a good idea to think about how products are actually brought to life whenever a new big trend emerges. Some of the most lucrative opportunities are also often the least obvious ones.

For AI to even work properly, companies have to invest large sums of capital expenditures (capex) into data centers. Although data centers might seem like just a piece of real estate, they are far more sophisticated and important. They house critical IT infrastructure, such as chipsets known as graphics processing units (GPUs) -- an important component of generative AI applications.

Today, Nvidia is one of the biggest names in the data center realm. But what if I told you I see another opportunity as the superior choice among data center investments and that it's not even a technology company?

It's important to consider all options -- even the most tangential ones. Let's dig into a nuclear energy stock that I think may end up being the most important data center company in the long run and explore why this could be a lucrative opportunity for investors.

Nuclear-powered data centers are on the rise, and...

A major selling point of AI is that the technology can bring a new wave of efficiency to a host of use cases. From breakthroughs in enterprise software to self-driving cars, AI is promising a new level of productivity and safety that's never been witnessed.

Although that sounds great, as with all things, AI comes with some major trade-offs. Namely, building AI applications is a pricey ambition. GPU hardware and high-performance computing software are some of the more obvious expenses in AI development. One of the more subtle costs in an AI roadmap resides with data centers, particularly their energy consumption.

GPUs are constantly running complex algorithms and performing sophisticated computing tasks. This makes IT architecture, such as server racks, consume a lot of energy and, in particular, give off a lot of heat. Data centers are equipped with a number of temperature control protocols, such as air conditioning units, fans, and generators.

However, these solutions are both costly and can be inefficient compared to other sources of energy control. An emerging trend at the crossroads of data centers and energy consumption is nuclear power, and some really notable companies and business leaders are getting involved.

...a lot of big names are involved

One notable company involved with nuclear-powered data centers is Amazon. One of the biggest businesses in Amazon's ecosystem is its cloud computing platform, Amazon Web Services (AWS). Earlier this year, AWS acquired a nuclear-powered data center from Talen Energy for a reported $650 million.