3 Great Stocks to Buy to Benefit From the Next Generation of AI Data Centers Led by Nvidia

Written by Lee Samaha for The Motley Fool->

Nvidia is leading an effort to build a new generation of data centers that are expected to ramp up in 2027.

Vertiv, GE Vernova, and nVent are all well-positioned to benefit from this trend in data center spending.

The explosive growth of artificial intelligence (AI) applications is not only driving a boom in data center investment, but also changing their design. Nvidia is driving the movement toward a new generation of 800-volt direct current (VDC) data centers set to launch in 2027.

The change in architecture will have ramifications for AI data center infrastructure companies and, according to Barclays analyst Julian Mitchell, could positively impact three stocks he has buy recommendations on. Here's a look at them.

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The shift to the new data centers enables the use of a 576 graphics processing unit (GPU) architecture rather than the current 72 GPU architecture. To create space in the IT rack to do this, it's necessary to create a stand-alone power center rather than have power conversion take place in the rack.

In a nutshell, the 800 VDC data centers reduce the number of power conversions by converting 13.8 kV alternating current (AC) from the grid to 800V as it enters the data center, then distributing it directly to a power shelf, which steps it down to 48V for use by GPUs. This saves significant space compared to legacy data centers that use bulky AC-to-DC converters in the IT rack.

Vertiv's (NYSE: VRT) power systems make it a key player in data center infrastructure, and it has a deep collaboration with Nvidia in place to develop the power architecture needed to convert grid AC to 800 VDC, as well as the DC-to-DC power shelves and other power systems (storage, backup, etc.) associated with the new architecture.

GE Vernova (NYSE: GEV) is the world's leading gas power turbine manufacturer and a leading player in electrification. While Vertiv's solutions operate within the data center, GE Vernova provides the heavy-duty electrical infrastructure needed to deliver power from the grid to the 800 VDC data center. In addition, it has a massive and growing backlog of gas power turbines to supply electricity to AI data centers and other applications.

nVent Electric's (NYSE: NVT) management has aggressively pivoted the company toward the data center market through acquisitions and disposals. It's a strategy that's worked, increasing the electrical protection and connection solutions company's exposure to data, not least through its liquid-cooling and power-distribution systems. The greater GPU density and associated heat in 800VDC data centers mean traditional air cooling alone won't be sufficient for high-density workloads, which plays to nVent's strength in liquid-cooling solutions that operate in the rack itself.

Vertiv's management recently held an investor conference where its chief product and technology officer, Scott Armul, noted that its 800VDC solutions will be commercialized at the beginning of 2027. "And from a timing standpoint, we expect a steady ramp throughout 2027 as we think about scaling and we think about ... the supply chain robustness and the build-out that needs to happen," he said.

It's a viewpoint shared by the Barclays analyst, who sees minimal impact in 2026 and 2027, with a significant impact starting in 2028 from 800VDC data centers. However, he also argues that there's upside potential to current Wall Street estimates for AI data center infrastructure companies in general in 2027 and 2028, before the rapid rate of growth starts to slow in 2029 and 2030.

It's a somewhat complicated outlook, but it implies favoring data center infrastructure stocks that have specific exposure to 800VDC data centers, because although there's upside potential for all data center infrastructure stocks in 2027 and 2028, the winners from 2029 onward could be stocks with exposure to the extra growth in the new 800VDC data centers.

In this respect, nVent, GE Vernova, and Vertiv are all relatively well placed, and are worth picking up on any extended market-led weakness.

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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Vernova, Nvidia, and Vertiv. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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