Power Stocks Face Supply Challenges Amid AI Growth

Wall Street has been punishing companies involved in AI data center infrastructure, with a median drop of 23% since late October. While major tech firms have only fallen 5%, the sector's biggest players have lost over $300 billion in market value. The recent downturn followed Meta's earnings report, which reignited concerns about AI infrastructure spending, though physical supply constraints remain unchanged. Experts highlight power as the primary bottleneck, with U.S. transformer supply down 15% and lead times at some manufacturers extending to 26 months. This has created a significant gap between demand and supply, pushing companies to secure long-term contracts and manage growing backlogs. As the sector faces tight timelines, upcoming earnings reports will provide critical insights into whether demand remains robust despite falling stock prices.