Who Benefits Most from the $725B DC Capex Wave?
2026 data centre capex from hyperscalers plus neoclouds totals ~$725B, up ~36% YoY. But these companies were already spending heavily, so the real question is: where does the incremental ~$190B of new spending land, who sees the biggest revenue uplift relative to their existing business, and who has the supply constraints to protect margins?
Tier 1 — Transformed: DC capex IS the company
These businesses are being fundamentally reshaped. DC demand matches or exceeds their entire current revenue.
VRT — Vertiv (Cooling & Power Distribution)
Arguably the most transformed company in the entire chain. Five years ago Vertiv was a sleepy $5B industrial business. Now orders are up 60% YoY, backlog is $9.5B with a 1.4x book-to-bill. Every megawatt of DC capacity needs cooling racks and power distribution — and Vertiv is one of very few scaled suppliers. Supply is genuinely constrained, supporting pricing. The incremental uplift from 2024 to 2026 could be 50-70% revenue growth.
ANET — Arista Networks (DC Networking)
Near pure-play DC networking, taking share from Cisco in back-end AI cluster connectivity. AI-specific networking revenue was ~$750M in 2025, targeting $1.5B+ in 2026. The shift to 800G+ Ethernet for AI clusters is a product cycle Arista owns. Every new GPU rack needs high-bandwidth switching — as the installed GPU base doubles, networking demand follows.
NVDA — NVIDIA (GPUs + NVLink + Systems)
Already transformed — DC revenue grew from $15B (FY23) to ~$188B (FY26) in three years. The story is now about sustaining 50%+ growth, not discovering it. Blackwell and Vera Rubin have half a trillion in visibility. Supply remains constrained (GPUs sold out), keeping gross margins at 73-75%. The long-term risk is custom silicon gradually eroding ~90% market share, but that’s a 2028+ concern.
Tier 2 — Major Driver: DC capex reshaping 40-65% of revenue
DC spending is the dominant growth engine but these companies retain meaningful diversification.
TSM — TSMC (Fabricates Everything)
The ultimate picks-and-shovels play. TSMC wins regardless of whether NVIDIA, Broadcom, AMD, or custom silicon wins — they fab all of them. HPC/AI is now 58% of revenue (up from 39% in 2022). Annual price increases locked in through 2029 because there is no alternative at advanced nodes. The supply constraint is physics — building leading-edge fabs takes 2-3 years, so capacity stays tight through 2027+.
AVGO — Broadcom (Custom ASICs + AI Networking)
The hidden story is how fast AI is reshaping the semiconductor half. AI revenue was ~$24B in FY2025, growing 60%+ YoY, with a $73B AI order backlog. Broadcom designs the custom ASICs for Google (TPUs), Amazon, and now OpenAI. As hyperscalers diversify away from NVIDIA, Broadcom is the direct beneficiary. AI networking adds another layer. The incremental growth is concentrated in the semi side — VMware software grows at low-double-digits.
MU — Micron (HBM & Server DRAM)
Every AI GPU needs 6-8 HBM stacks, and HBM is in severe shortage. Micron is the only US-listed pure play — SK Hynix (~50% share) and Samsung (~25%) are Korean-listed. HBM pricing runs at 3-5x regular DRAM per bit, and the constraint won’t ease before 2027. Margins went from negative to record levels in 18 months. Risk: Korean competitors and eventual oversupply could compress pricing.
Tier 3 — Solid Tailwind: DC is 10-38% of revenue
Meaningful exposure but well-diversified. Less upside but also less risk if DC spending slows.
PWR Quanta Services / EME EMCOR — DC Construction
Record backlogs ($39B for PWR) driven by DC buildout AND the grid infrastructure to power it. The key constraint is skilled craft labour — you can’t quickly train data centre electricians, which protects margins. They benefit twice: building the DCs and building the transmission/substation infrastructure to feed them. Lower risk than pure-play DC names because they also serve grid, renewables, and industrial markets.
ETN Eaton / CAT Caterpillar — Power Infrastructure
Eaton (UPS, switchgear, PDUs) has more DC leverage at ~28% of revenue, with 12-18 month lead times supporting pricing. Caterpillar (backup generators) benefits but DC is ~10% of a massive diversified business — a nice tailwind, not thesis-changing. Both benefit from supply constraints on electrical equipment but neither is being reshaped by this cycle.
Why Supply Constraints Matter: Pricing Power Across the Chain
The revenue uplift is only half the story. What makes this cycle particularly attractive is that supply bottlenecks are creating a seller’s market at almost every layer, meaning growth comes with margin expansion rather than compression.
TSMC — monopoly on advanced nodes, annual price rises locked in through 2029. NVIDIA — GPUs sold out, 73-75% gross margins at massive scale. HBM memory — physical shortage, 3-5x premium pricing. Vertiv/Eaton — cooling and power equipment backlogs at record levels, 12-18 month lead times. Quanta/EMCOR — skilled labour shortage in electrical trades creates barriers to competition. These constraints look durable through at least 2027.
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