AI electricity gap fuels Weichai Power, GE Vernova shares as generator demand surges
AI’s explosive growth is triggering a global power crisis, as data centres deploy backup generators amid soaring electricity demand
An electricity shortfall for AI data centres and computing power is fuelling demand for generators and power equipment, driving up stocks from Weichai Power in China to GE Vernova in the US.
The AI investment spree in the world’s two largest economies, which are vying for a leading position in the cutting-edge technology, has rekindled buying interest in stocks of a sector viewed as old economy.
Shares of Weichai Power, a heavy-duty truck maker that also builds large-bore engines, have jumped more than 130 per cent in Shenzhen over the last 12 months, while its Hong Kong-listed stock has almost tripled. Peers Tellhow Sci-Tech and Anhui Yingliu Electromechanical have also outperformed in mainland China.
In the US, power-equipment maker GE Vernova has led its peers, including Caterpillar and Bloom Energy, with a gain of 157 per cent over the past year.
“Against the backdrop of an intensified AI race, record capital expenditure and buildout of data centres, power shortages are hampering computing power,” said Yao Jian, an analyst at Shanxi Securities. “Turbine engines turn out to be the best solution for [overcoming] the shortage, because of short construction cycles, high thermal efficiency and clean emissions. Relevant equipment makers are now in for a new development opportunity.”
Strong quarterly results from leading tech companies such as Advanced Micro Devices and a detente in Middle East tensions have reinforced the belief that hyperscalers will keep pouring money into the AI buildout, further fuelling demand for electricity as well as power-generating equipment. The Nasdaq 100 Index rose to a record this week.