A chief strategist at a $31 billion firm says to stick with the AI power bottleneck — and shares 3 stock picks

Alger Investments, which manages $31 billion in assets, is sticking with AI power stocks, with director of market strategy Brad Neuman telling Business Insider that the firm is more worried about supply than demand for data center energy. Alger projects data centers will use 25% of US electricity by 2030, up from 10% today, and Neuman highlighted GE Vernova, FTAI Aviation, and Bloom Energy as stock picks to play the bottleneck.

A chief strategist at a $31 billion firm says to stick with the AI power bottleneck — and shares 3 stock picks Business Insider https://www.businessinsider.com - Alger Investments' Brad Neuman recently told BI that the firm continues to bet on AI-power stocks. - Data centers are expected to use 25% of US electricity by 2030, up from 10% today, Alger projects. - He highlighted three stocks to play the trade: GE Vernova, FTAI Aviation, and Bloom Energy. A few months back, semiconductor stocks https://www.businessinsider.com/ai-chip-stocks-memory-hardware-sell-off-where-to-invest-2026-7 were hardly the only ones to take it on the chin when investors got spooked about a potential pullback in hyperscaler spending. Stocks across the AI value chain were hit with force, including energy infrastructure firms. From June 22 to July 29, the Defiance AI and Power Infrastructure ETF AIPO https://markets.businessinsider.com/etfs/defiance-ai-power-infrastructure-etf-us88636r4790?miRedirects=1 fell 24%. If investors were going to start pressuring AI's big spenders to tighten their purse strings, then these power companies wouldn't be so in demand. Since the end of July, a couple of catalysts have driven the stocks higher: hyperscalers like Microsoft https://www.businessinsider.com/microsoft-stock-price-q2-earnings-meta-ai-trade-azure-spending-2026-7 and Amazon have shown they can monetize their investments, and AI infrastructure stocks have shown in earnings https://www.businessinsider.com/ai-infrastructure-trade-gets-a-boost-coreweave-nebius-nvidia-earnings-2026-8 that there's no slowdown in spending happening. Brad Neuman, the director of market strategy at Alger Investments, which manages $31 billion in assets, says to stick with the trade as it rebounds. He said if there's any risk to the trade, it's not a pullback in AI spending. It's instead the prospect of energy firms being unable to fulfill demand. "We're more worried about supply than demand. In other words, the ability to bring on data centers, build them, connect them to the grid, etc., rather than demand, which is I think growing very fast for end user tokens," he told Business Insider in an August 12 interview. He added: "I think that's growing over 10x year on year, and it's hard to meet that demand." Alger is estimating that data centers will use 25% of total US electricity by 2030, up from roughly 10% today. To meet that demand, energy generation will have to increase accordingly, he said. The firm is projecting that terawatt-hours generated in the US will double between now and 2040. Neuman said the firm will continue to invest in the AI power bottleneck, betting on companies positioned to help build the infrastructure to meet the heightened demand levels. He shared three stocks to ride the theme. 3 stocks to play the bottleneck First, Neuman highlighted GE Vernova GEV https://markets.businessinsider.com/stocks/gev-stock . The company produces natural gas turbines, which power data centers, Neuman said. GE Vernova has a five-year backlog in orders for their turbines, he said, which will boost its earnings growth into the 2030s. However, investors still aren't pricing in that growth, he said. The stock is up 58% this year, and 72% since last August. Second, he pointed to FTAI Aviation FTAI https://markets.businessinsider.com/stocks/ftai-stock . The firm has traditionally focused on refurbishing turbines for the aerospace industry, but has been able to provide its services to the AI data center buildout, providing a big boost to earnings. "That's a brand new business that they're getting into," Neuman said, adding: "We think the business is attractive just on its existing aerospace products." The stock is up 8% this year, and 59% over the last 12 months. Third, Neuman spotlighted Bloom Energy BE https://markets.businessinsider.com/stocks/be-stock . The company builds fuel cells that generate power through combining oxygen and natural gas, a method that's faster than turbines in generating power, Neuman said. He added that the firm expects it will be able to ramp up its energy production capacity even further in the years ahead. "They're serving a big niche there in helping data centers get online quickly," he said. The stock has risen 135% in 2026, and about 400% over the last 12 months. Alger has had impressive success betting on the AI trade in recent years. Two of their funds — the Alger Focus Equity Fund ALGRX and the Alger Capital Appreciation Institutional Fund ACAYX — have beaten at least 97% of their peers over the last five years, and are rated five-star funds by Morningstar. Business Insider https://www.businessinsider.com/ai-power-bottleneck-stocks-to-buy-now-infrastructure-gev-ftai-2026-8 Get AI news in your inbox Daily digest of what matters in AI.