While hyperscalers building next-generation cloud platforms and semiconductor giants producing HBM chips are stealing the spotlight in most instances, the physical structure of the artificial intelligence (AI) industry relies on a less glamorous but equally critical pillar — power infrastructure. This includes utilities like NextEra Energy NEE and grid-to-chip infrastructure providers like Eaton Corp. ETN that generate and manage the electricity which feeds power-hungry AI data centers, thereby enabling the smooth operation of high-capacity large-language model (LLM) workloads.
Amid the ongoing AI data center boom, these firms are thus profiting immensely by providing the essential "picks and shovels" for the AI era.
For investors who are increasingly wary of overconcentrated exposure or high valuations in mega-cap technology and hyperscale cloud platforms, shifting focus toward exchange-traded funds (ETFs) holding these physical enablers provides an excellent way to diversify portfolios while staying tethered to the AI secular tailwind.
Below, we discuss how these power infrastructure and utility companies are benefiting from the unprecedented AI data center expansion, using specific examples to provide the insights investors may need before making investment decisions.
The Physical Backbones of the AI Build-Out
The rapid transformation of data centers into dense, high-performance computing "AI factories" is driving massive order backlogs and thereby strong revenue growth visibility for electrical equipment manufacturers, utility players, as well as grid management and data center cooling solutions providers like those mentioned below:
Quanta Services PWR: It is the largest electrical contractor in the United States by revenues, specializing in the construction of high-voltage transmission lines, electrical substations, and comprehensive power grid infrastructure. It ended the first quarter of 2026 with a record backlog of approximately $48.5 billion, with management highlighting data centers as a major growth engine.
Eaton: It provides essential switchgear, circuit breakers, transformers, and power distribution equipment for data centers and the grid. ETN’s 12-month rolling average order for its Electrical Americas segment went up 42% in the first quarter, driven by data center momentum.
Bloom Energy BE: It offers solid oxide fuel cells for on-site power generation, reducing dependence of data centers on the grid and minimizing exposure to power interruptions. The company has signed multiple agreements with hyperscalers, the latest of which is with Oracle to deploy 2.8 gigawatts (GW) of Bloom’s fuel cell systems to support the rapid buildout of Oracle’s AI and cloud computing infrastructure.
Meanwhile, the massive 1.8 GW Wyoming data center facility is expected to include 900 megawatts (MW) of Bloom’s fuel cells, representing about $3 billion in revenues for BE in the coming years, according to an analysis by Morgan Stanley’s David Arcaro. (as cited in CNBC).
Caterpillar CAT: It supplies on-site power generation and cooling equipment for data-intensive facilities. The company registered a solid 22% year-over-year improvement in its Power & Energy segment’s sales during the first quarter, thanks to rapid deployment of large reciprocating engines and turbines, primarily in data center applications.
NextEra Energy: It is the world's largest publicly traded utility by market cap, which currently expects to build between 15 and 30 GW of new generation capacity for U.S. data centers by 2035. In March 2026, the U.S. Department of Commerce selected NEE to build 9.5 GW of new gas-fired generation to serve large load from data centers in Texas and Pennsylvania.
AI Infrastructure Spending Outlook & ETFs to Buy
Since AI-related facilities require enormous amounts of power, global investments in transmission networks, substations, grid modernization, and power generation projects are rising rapidly. To this end, Gartner projects building AI foundations to alone drive a 49% increase in spending on AI-optimized servers in 2026, while AI infrastructure is expected to add $401 billion in spending this year as technology providers build out AI foundations.
Amid this backdrop, investors looking to capture this physical spending wave through diversified baskets rather than picking individual stocks may consider adding the following ETFs, focused directly on fueling the physical AI build-out, to their portfolios:
Global X U.S. Infrastructure Development ETF PAVE
This fund, with net assets worth $14.76 billion, offers exposure to 100 companies that stand to benefit from a potential increase in infrastructure activity in the United States, including those involved in the production of raw materials, heavy equipment, engineering, and construction. PWR holds the top spot in this fund, with 3.97% weightage, while ETN holds the fourth spot with 3.25% weightage.
PAVE has soared 25.5% year to date and carries a Zacks ETF Rank #2 (Buy). The fund charges 47 basis points (bps) as fees and traded at a good volume of 2.29 million shares in the last trading session.
First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF GRID
This fund, with net assets worth $11.96 billion, offers exposure to 120 companies that are primarily engaged and involved in electric grid, electric meters and devices, networks, energy storage and management, and enabling software used by the smart grid infrastructure sector. ETN holds the top spot in this fund, with 8.24% weightage, while PWR holds the fourth spot with 8.04% weightage.
GRID has surged 24.3% year to date and carries a Zacks ETF Rank #2. The fund charges 56 as fees and traded at a volume of 0.52 million shares in the last trading session.
iShares U.S. Infrastructure ETF IFRA
This fund, with net assets worth $4.69 billion, comprises 161 U.S. companies with infrastructure exposure by balancing across both infrastructure enablers and infrastructure asset owners. CAT holds the top spot in this fund, with 4.27% weightage, while NEE holds the second spot with 3.97% weightage. PWR holds the fourth position in this fund with 3.68% weightage.
IFRA has rallied 21.8% year to date and carries a Zacks ETF Rank #2. The fund charges 30 as fees and traded at a volume of 0.30 million shares in the last trading session.
First Trust Alerian U.S. NextGen Infrastructure ETF RBLD
This fund, with net assets worth $40.8 million, comprises 101 U.S. infrastructure companies. BE holds the top spot in this fund, with 1.94% weightage, while CAT holds the ninth spot with 1.20% weightage.
RBLD has rallied 21.4% year to date and carries a Zacks ETF Rank #2. The fund charges 30 as fees and traded at a volume of 0.003 million shares in the last trading session.
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Global X U.S. Infrastructure Development ETF (PAVE): ETF Research Reports
First Trust NASDAQ Clean Edge Smart Grid Infrastructure ETF (GRID): ETF Research Reports
iShares U.S. Infrastructure ETF (IFRA): ETF Research Reports
Bloom Energy Corporation (BE) : Free Stock Analysis Report
First Trust Alerian U.S. NextGen Infrastructure ETF (RBLD): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
