Key Points
- The U.S. economy is being reshaped by a massive wave of AI-driven infrastructure spending.
- NextEra Energy’s merger with Dominion Energy highlights how utilities are positioning themselves to support the growing power demands of AI development.
- Nvidia could emerge as one of the biggest beneficiaries as expanded data-center construction drives demand for advanced AI computing hardware.
We’re entering a new era of artificial intelligence (“AI”) in 2026, and it’s transforming the economy at breakneck speed.
In fact, the U.S. gross domestic product (“GDP”) data for the first quarter, released on April 30, shows that spending tied to AI, in the nonresidential fixed-investment category, has supplanted consumer spending.
This shift is a signal that the country has a new economic engine.
And NextEra Energy’s (NEE) planned $66.8 billion acquisition of Dominion Energy (D) – the largest utility merger ever – solidifies it.
AI dominance means electricity demand is rising fast. The deal could be good for NextEra Energy shareholders as the combined company scales up to meet AI’s needs.
But we think there’ll be an even bigger winner: market-leading chipmaker Nvidia (NVDA).
The AI-Infrastructure Boom Is Real
Throughout history, consumer spending has been the primary driver of economic growth. So, it wasn’t a surprise when personal consumption expenditures (the Federal Reserve’s metric for consumer spending) outpaced GDP (the value of all goods and services produced by the economy) in the first quarters of 2024 and 2025.
Then, in this year’s first quarter, a subtle but powerful shift occurred. Consumer spending took a back seat to growth in nonresidential fixed investment.
Growth in capital expenditures (“capex”) for new assets – like manufacturing plants, software, and equipment – surged from 0.22% in the first quarter of 2024 to 1.24% in the first quarter of 2025, before climbing to 1.39% in the most recent quarter.
This investment boom has overtaken consumer spending as the primary driver of U.S. economic growth.
Take a look…
And the massive spending on AI by the world’s largest technology companies – Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META), Microsoft (MSFT), and Oracle (ORCL) – is what’s fueling that boom…
The combined capital spending of these five tech giants totaled about $271 billion (on a trailing-12-months basis) in April 2025. That surged 78% higher, to $482 billion, as of the latest quarter. This spending is expected to rise sharply through the end of 2026, to more than $700 billion.
And it could go even higher. Baird analyst Colin Sebastian expects this investment spree to exceed $900 billion next year. Evercore ISI analyst Mark Lipacis sees it reaching about $1.1 trillion.
These bold projections are based on the huge backlogs at major tech firms to provide AI-related data services to their customers. Alphabet, Amazon, Microsoft, and Oracle together expect about $2 trillion in future revenue from existing contracts, technically known as remaining performance obligations, or “RPOs.” (Meta uses the data centers it builds for its own services, like Facebook, and doesn’t report these obligations.)
They’ll begin logging this revenue once the necessary data centers are built over the next few years. And no U.S. state expects to have more new data centers built in the years ahead than Virginia.
Virginia Is Powering the AI Data-Center Build-Out
Virginia’s 287 planned facilities, plus the 398 currently in operation, will bring the state’s total to about 685 data centers.
That’s nearly 50% more than Texas, which has 170 planned and 296 in operation (for a total of 466), despite Texas being almost seven times larger in area.
New data centers can consume as much electricity as 1,000 Walmart stores. That’s because they’re powering energy-hungry AI models like OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude.
The growing importance of Virginia to the data-center industry, coupled with the meteoric rise in electricity demand, both set the stage for Florida-based NextEra Energy to acquire Dominion Energy, Virginia’s largest electric utility, on Monday.
Two months ago, Dominion Energy CEO Robert Blue told analysts at the 2026 CERAWeek conference that data centers alone accounted for about 28% of the company’s electricity sales in Virginia last year. Look for that percentage to grow even higher in the years to come if all 287 of those planned data centers are completed and come on line.
Executives at both utilities figure a combined NextEra and Dominion can provide the affordable power all those data centers need, faster and more efficiently than a smaller Dominion could on its own. The deal is expected to close in the next 12 to 18 months, subject to regulatory approval.
An Under-the-Radar Winner in the NextEra-Dominion Deal? It’s Nvidia – Here’s Why
Back in January, we noted that no single stock has personified the AI story more than Nvidia.
The company’s graphics processing units (“GPUs”) provide the raw computing power that customers, such as OpenAI, rely on to process large and complex AI workloads. It’s fair to say that the AI boom couldn’t have happened without Nvidia.
Each quarter, it pours billions of dollars into new research and development, making it nearly impossible for competitors to keep pace. Evercore’s Mark Lipacis figures that Nvidia has an eight-year lead over its competitors.
Sure, the company’s extremely high revenue growth and extraordinary profit margins have attracted significant competition, including from semiconductor firm Advanced Micro Devices (AMD). But the AI boom is plenty big enough for multiple winners.
Besides, reportedly, even Nvidia’s wayward customers tend to return. Morgan Stanley analyst Joe Moore recently told the investment bank’s clients, “We consistently hear that customers see a competitive product as potentially lower [in] cost, put it [to] use, and [later] come back to Nvidia.”
Bottom line: Nvidia’s GPUs are essential equipment for AI data-center operators, even amid the growing competition. But here’s what you really need to know…
Nvidia CEO Jensen Huang has estimated that about $35 billion of the $50 billion price tag to build an AI data center is typically paid to Nvidia.
That works out to about 70% of the total cost.
We expect this utilities deal to fast-track Virginia’s electrical-infrastructure build-out. That will fuel data-center completion.
In today’s AI race, going big is the way to win. NextEra-Dominion can prove it in utilities, likely sparking more megadeals in key locations (like Texas) – and pushing U.S. data centers to market faster.
All of this will drive chip demand… and Nvidia’s future growth.
In summary, we stand by the prediction we first made in a May 2023 issue of Select Value Opportunities, the service I publish exclusively for Stansberry Alliance members.
Generative AI will be the greatest technology disruption of our lifetime.
Three years in, the AI story is still unfolding… And there’s no company better prepared to exploit it than Nvidia.
Good investing,
Mike Barrett
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