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FEATURED ARTICLE |
AI Trade: 5 Infrastructure Companies That Could Be Quietly Mispriced |
If you've been watching markets lately, you've probably noticed something that feels… almost unfair: |
The best "AI" stocks in this phase often aren't the ones building chatbots. |
They're the ones keeping the lights on, the servers cool, the power clean, and the data moving—quiet, unglamorous businesses that sit downstream of the hype and upstream of the revenue. |
And that's exactly why investors have been "rotating" into infrastructure. |
Because infrastructure is where the bottlenecks live. |
And bottlenecks are where pricing power—and surprise earnings—tend to show up. |
The macro setup: AI is becoming a capex-and-electrons story |
Multiple research shops and news outlets have been highlighting that the AI cycle is evolving into a capital-intensive buildout: data centers, networking, and—most importantly—power. |
Even utilities are talking about surging load from data centers and AI. Southern Company, for example, raised its five-year capex plan to $81 billion and said it has 10 gigawatts of contracted load tied to big clients like Google, Meta, and Microsoft—an unusually concrete "AI demand" datapoint from a regulated utility. |
So today we're going to do the Cheap Investor thing: |
Name the choke points Find the less-hyped beneficiaries Score what's "cheap" vs. what's just "popular" Spell out what could go right… and what could go wrong
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Below are five infrastructure picks-and-shovels stocks with real numbers behind the story—plus a clear-eyed look at valuation risk. |
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The Cheap Investor framework for "AI infrastructure bargains" |
Before the tickers, here's the scorecard I care about in this space: |
Demand visibility (orders, backlog, book-to-bill, contracted capacity) Operating leverage (margin expansion as volume scales) Balance sheet safety (net leverage, liquidity, refinancing risk) Capex discipline (building ahead of demand is how you blow up) Valuation vs. growth (cheap relative to durable growth, not cheap because the business is broken)
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Now, the list. |
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1) Atkore (ATKR) — The "electrical plumbing" trade that doesn't get enough AI credit |
What it does (in plain English) |
Atkore is not an AI company. It's a materials-and-components company that sells the stuff you need to physically build and wire modern infrastructure—conduit, fittings, cable management, and related products. |
If you're building (or retrofitting) data centers, industrial sites, and grid infrastructure, you don't skip this layer. You just argue over who supplies it. |
Why it matters for AI infrastructure |
Data centers are basically "electricity → computing → heat."
Atkore sits on the electricity side—feeding construction demand tied to power-heavy builds. |
If AI buildouts keep ramping, you should expect sustained demand for electrical components even when software cycles wobble. |
The hard numbers that make it interesting |
Atkore reiterated full-year guidance that implies meaningful earnings power: |
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And on valuation, Atkore screens like a "value" name versus many AI-adjacent plays. GuruFocus shows a forward P/E ~12.77 (as of mid-Feb 2026). |
That's not a guarantee of undervaluation—but it's structurally different from the "pay 30–50x earnings for an infrastructure ramp" trade. |
What could go right |
Data-center and grid capex stays elevated → Atkore demand holds better than cyclicals The market starts treating ATKR like "infrastructure picks-and-shovels" rather than a commodity supplier Any stabilization in pricing + steady volumes can expand margins quickly
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What could go wrong (the real risks) |
Cyclicality: parts of Atkore's business can behave like a construction cycle, not a secular growth story Competitive pricing: if competitors get aggressive, the "cheap multiple" can be a trap End-market concentration: if data-center construction pauses, ATKR won't be spared
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Cheap Investor take:
ATKR looks like the kind of name that can be "cheap" for real—if you believe data-center and electrical buildouts remain a multi-year theme and don't cliff-dive. |
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2) nVent Electric (NVT) — A real data-center revenue ramp hiding in plain sight |
What it does |
nVent sells electrical connection and protection systems: enclosures, thermal management, power distribution, and related infrastructure. |
In the AI era, "little" things like heat management and reliable power distribution become "big" things, fast. |
The AI infrastructure signal investors may be missing |
nVent's data-center business has been scaling rapidly. Seeking Alpha summarized that data center revenue grew to $1B in 2025, up from $600M in 2024. |
That's not "AI hype." That's revenue. |
And nVent's outlook implies the company expects momentum to continue: |
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Why it might be "cheap" in the Cheap Investor sense |
If nVent can keep compounding a data-center line item while maintaining solid margins, the stock can re-rate from "industrial" to "secular infrastructure compounder." |
That re-rating is where investors make money. |
What could go right |
AI buildouts demand not just servers, but thermal + electrical reliability nVent becomes a "trusted vendor" in standardized data-center designs Continued earnings growth forces the market to pay a higher multiple
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What could go wrong |
Execution risk: scaling fast can mean missed deliveries, warranty issues, or margin surprises Competition: large electrical players don't give up share easily If hyperscalers pause builds, "fast-growing" data-center revenue can slow sharply
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Cheap Investor take:
NVT is the kind of "boring compounder" that can be undervalued if the market still thinks it's mostly a slow industrial—while the data-center mix says otherwise. |
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3) Applied Digital (APLD) — High-upside "AI factory" infrastructure… with real balance sheet risk |
What it does |
Applied Digital builds and operates high-performance data centers and hosting infrastructure. Think of it as a capacity-and-power developer trying to become a key landlord/operator in the AI compute era. |
This is not a "safe" stock. It's a high beta infrastructure buildout story. |
The numbers (and why you should care) |
From its fiscal Q2 2026 release: |
Total revenue: $126.6M, up 250% YoY It cited HPC Hosting revenue of $85.0M for the quarter and $111.3M for the six months ended Nov. 30, 2025 Data Center Hosting segment generated $41.6M revenue in the quarter, +15% YoY, and $16.0M segment operating profit on $130.8M in reported assets Balance sheet snapshot: $2.3B in cash/restricted cash and $2.6B in debt
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It also described multi-year capacity expansion: facilities with 100MW operating, and 150MW and 200MW projects expected online in calendar 2026–2027 timeframes. |
Why APLD can be "cheap" or a value trap |
APLD is "cheap" only if: |
it executes the buildout on time, keeps cost of capital manageable, and converts demand into long-duration cash-flowing leases.
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If it misses those steps, the stock isn't cheap—it's just early. |
What could go right |
Scarcity value: AI-ready powered capacity can become a premium asset Leasing momentum improves financing terms and reduces dilution risk If the market starts valuing APLD like an "AI infrastructure landlord," multiple expansion can be dramatic
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What could go wrong |
Debt + capex: the easiest way to lose money in this theme is financing projects too aggressively Execution risk: delays, cost overruns, interconnect/power issues Customer concentration: hyperscaler relationships are powerful—but not always friendly
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Cheap Investor take:
APLD is the "asymmetric" pick—big upside if it nails execution, big downside if the buildout slips. This one belongs in the "small position, high vigilance" bucket. |
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4) Belden (BDC) — Industrial connectivity quietly benefiting from data-center complexity |
What it does |
Belden makes connectivity solutions—networking, cabling, and industrial data infrastructure. |
AI data centers are not just "more servers." They're increasingly more complex networks, with denser and more demanding connectivity needs. |
The numbers that show real operational strength |
Belden reported record results: |
Q4 revenue: $720M, up 8% YoY Full-year 2025 revenue: $2.715B, up 10% YoY Full-year adjusted EPS: $7.54, up 19% YoY
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This is the kind of profile Cheap Investor readers like: a company growing, generating cash, buying back stock, and not living on hype alone. |
Why it might be mispriced |
Belden doesn't get a "pure AI multiple." It often trades like an industrial/solutions name. |
If AI-driven connectivity spend persists, BDC can keep compounding and the multiple can quietly drift higher—especially if the business mix improves. |
What could go right |
Industrial + data-center connectivity demand remains durable Solutions mix boosts margins over time More buybacks at attractive prices improve per-share growth
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What could go wrong |
Macro sensitivity: industrial customers can pause spending Competitive pressure in networking/cabling categories If "AI infra capex" rotates elsewhere (power/cooling), connectivity spending could lag
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Cheap Investor take:
BDC is a "boring execution" story. If you want AI infrastructure exposure without the balance-sheet fireworks, this is a cleaner profile. |
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5) Vertiv (VRT) — Not unknown, not always cheap… but the cleanest "AI data center plumbing" bellwether |
What it does |
Vertiv sells critical infrastructure for data centers: power, thermal management, and related systems. |
When hyperscalers build AI capacity, Vertiv is often in the room. |
The numbers are loud |
Vertiv's Q4 2025 results were the definition of demand visibility: |
Q4 net sales: $2.88B, +23% YoY Q4 organic orders: +252% YoY Book-to-bill: ~2.9x Backlog: $15.0B, +109% YoY Q4 operating cash flow: $1.005B; adjusted free cash flow: $910M Net leverage: ~0.5x (balance sheet strength matters in capex booms) 2026 outlook: net sales $13.25B–$13.75B, with organic growth 27%–29%
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That backlog figure is the kind of "future revenue line-of-sight" investors pay up for. |
So… is it "cheap"? |
Vertiv can be expensive when the market is euphoric. But here's the Cheap Investor nuance: |
A stock doesn't need to be low-multiple to be "cheap."
It can be "cheap" relative to its visibility, margins, and cash generation—especially if it sells off on macro fear while backlog stays firm. |
What could go right |
Backlog converts into revenue without margin erosion Continued operational leverage as volumes scale Vertiv becomes the default vendor for high-density AI data center buildouts
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What could go wrong |
Tariffs/input costs can pressure margins (Vertiv itself cited tariff impact in its release) Any slowdown in hyperscaler ordering can hit the stock quickly Competitive pricing can rise as rivals chase the same demand
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Cheap Investor take:
VRT is the "quality bellwether." It's the one you watch for clues about the entire AI-infrastructure cycle—especially orders and backlog. |
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The "unknown players" angle: why these names can rise even if the Mag 7 chops sideways |
Here's the biggest mental shift: |
AI infrastructure has multiple paychecks. |
Even if Nvidia or the mega-caps cool off for a quarter, hyperscalers still have to: |
build power and cooling capacity already planned, connect more boxes, upgrade electrical systems, and reduce downtime.
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That's why "infrastructure" can outperform in messy tapes: it's tied to projects, not just narratives. |
And that's also why some investors have been looking beyond obvious AI winners and into less-hyped infrastructure exposures. |
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A Cheap Investor action plan: how to play this without getting cute |
1) Treat this as a basket, not a single bet |
Infrastructure cycles can surprise you—good and bad. A basket approach reduces the "one company blew up my thesis" problem. |
2) Split your basket into two sleeves |
Core compounders (lower drama): VRT, NVT, BDC Optionality / higher risk: APLD, ATKR (depending on cycle view)
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3) Your three "tell me I'm wrong" signals |
If you're watching AI infrastructure for the next 6–18 months, track: |
Orders / backlog momentum (VRT is a great tell) Utility capex and contracted load (power demand is the constraint) Project financing conditions (higher rates punish the APLD-style buildouts first)
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Bottom line |
Hey bargain hunter—if the market is shifting from "AI hype" to "AI reality," infrastructure is where reality gets priced. |
The opportunity isn't to find the flashiest AI demo. |
It's to find the companies with: |
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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investing involves risk, including the potential loss of principal. Always do your own research before making investment decisions. |
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