Investing.com -- The race to power artificial intelligence is creating an energy rush across the United States, and Morgan Stanley (NYSE:MS) believes the winners are emerging fast.
“Recent data points skew bullish on AI infrastructure spend and power demand,” the firm wrote in a note to clients on Tuesday, forecasting a coming wave of “multiple large data center power deals.”
The projected power bottleneck for U.S. data centers now stands at 45 gigawatts through 2028, according to Morgan Stanley’s latest model.
With no clear federal fix in sight, the bank’s analysts expect natural gas to bridge the gap, followed by nuclear.
Companies involved in generation, grid infrastructure, carbon capture, and equipment supply are seen as likely to benefit from what the firm calls “time to power” dynamics.
Morgan Stanley sees near-term catalysts, including the passage of Senate Bill 6 in Texas, which could unlock projects involving Vistra, NRG, ExxonMobil (NYSE:XOM), and Energy Transfer (NYSE:ET).
They’re also watching for announcements tied to ET’s “Stargate” pipeline permit request and a broader regulatory push to accelerate project approvals.
“We believe any company that can play a role in providing a ‘time to power’ solution will be well positioned to secure stronger margins under longer duration contracts,” the analysts wrote.
Top stock picks from Morgan Stanley’s bullish power thesis include: EQT (ST:EQTAB), ET, WMB, SRE, VST, BE, XOM, CMI, PEG, AES (NYSE:AES), NEE, and VRT.
While 2024 was transformative, the firm believes it was “just a prelude to a much more active 2025.”