Most people take water and electricity for granted.
I say “most” because even now in 2025, there are still millions of people who live without access to both on a daily basis.
And as demand for artificial intelligence (AI) surges in the coming years, both resources will be pushed to their absolute limits.
AI data centers require large amounts of both water and electricity. Regular readers know about the dire need for an upgrade to electrical grids both in the U.S. and abroad. Without a solution, these grids will fail from the continued strain.
According to the U.S. Department of Energy (DOE), the demand for electricity from data centers is expected to increase 13% to 27% annually between now and 2028. The total amount of electricity required from U.S. data centers could reach between 325 and 580 terawatt-hours (TWh) – between 6.7% and 12% of total electricity demand in the country.
For perspective, data centers required 176 TWh of electricity in 2023.
The majority of that growth will come from AI servers – as opposed to the traditional data center servers that have been in place for years. The electricity needed to power these new AI servers will grow 4X to 8X in the next four years and eventually pass traditional servers.
Based on those projections, we’ll see an even bigger increase in the demand for water as more data centers come online…
Water demand is expected to increase 17% to 33% annually by 2028 and reach total usage of 145 to 275 billion liters. As newer AI servers are built, more liquid cooling (which uses water) will be needed to keep those servers performing at peak efficiency.
I realize these DOE growth projections are wide. But the bottom line is that the U.S. is going to need a lot more electricity and water in the next few years. And that’s likely to continue well into the future thanks to the growth of AI.
So while most investors are looking for the next Nvidia (NVDA) – and there will undoubtedly be some huge tech winners in 2025 – every investor needs to broaden their scope when it comes to AI and adding new stocks to their portfolio…
What makes the AI megatrend so unique is that it will eventually touch every sector out there. And that will create a multitude of investment opportunities over the next decade.
That’s why it might be time to consider the water and electricity sectors. Adding certain stocks from these spaces will provide you with exposure to the AI megatrend while simultaneously diversifying your portfolio across a variety of industries.
As you can see in the chart below, the water and utilities index lagged the S&P 500 over the last 12 months.
That underperformance could change in the next few years. And even if it doesn’t, the two sectors could help reduce your overall risk during corrections in the overall market. After all, utilities are often considered “safe haven” assets.
I encourage you to think outside the box in 2025 and don’t always settle for the obvious choices in megatrends like AI. Instead, look for the secondary investment opportunities that can ride the coattails of a thriving trend.
Here’s to the future,
Matt McCallEditor, Market Insights
The post Discover the Hidden Potential Behind These Two Vital Resources appeared first on Centurion Publishing.
