AI is very power-intensive — and its power needs are only set to rise in the coming years.
Morgan Stanley Investment Management's Aaron Dunn says the "next big bottleneck" for the hyperscalers — which are doing a lot of the cloud computing for AI applications — is either power or fiber.
And that's why Dunn is "pretty bullish" on utilities, naming one stock to play it: CMS Energy .
"And so these utilities … have a very favorable opportunity to draw solid earnings growth and good returns for them," Dunn concluded.
Their power consumption is set to grow at a compound annual growth rate of 11% through 2030, the bank said.
Persons:
Morgan Stanley, Morgan Stanley Investment Management's Aaron Dunn, CNBC's, Dunn, Eaton Vance, BofA, — CNBC's Pia Singh
Organizations:
Morgan, Morgan Stanley Investment, Morgan Stanley U.S . Value, CMS Energy, CNBC, Emerson, Nvidia
Locations:
United States