00:00 Now, of course, running the boat and the driver right now,
00:03 NVIDIA, everyone was looking for it.
00:05 They still got the beat and data centers are really hot.
00:09 What's going on in this situation?
00:11 And where else can we be looking
00:13 for opportunities here in data center?
00:16 - Yeah, I feel, you know, the focus is on NVIDIA
00:20 and rightly so.
00:21 I don't think we've ever seen a large cap company like this,
00:27 you know, do what they're doing on both sales
00:30 and the earnings growth side.
00:32 Earnings expected to be up over 200% this year
00:35 and over 50% next year.
00:38 And that's before the analysts are even revising again.
00:41 So it'll probably pop up a bit more,
00:43 but valuation is pretty pricey on NVIDIA right here.
00:47 I am the value stock strategist.
00:49 So these are the things I look at
00:51 and I just can't stomach paying that much for NVIDIA,
00:54 but the AI and the data center side specifically for AI
00:59 is red hot 'cause those chips have to go somewhere
01:02 and they're going into the data centers.
01:04 So I tend to look at who else is gonna benefit from this.
01:08 And there are some other companies.
01:09 There's the ones who are gonna build the data centers,
01:12 right, those have to, they have to build them.
01:14 And then there's the side where
01:17 maybe you have to maintain it.
01:19 It needs services.
01:22 You have to cool it.
01:23 We just had a recent episode in Singapore
01:26 where one of the data centers caught on fire
01:28 and a couple of the large banks,
01:31 the largest banks in the world said,
01:32 "Hey, you can't, you know,
01:35 "we can't do any transactions right now."
01:37 And I initially thought that was like a cyber attack,
01:39 but no, it turned out to be this fire in the data center.
01:43 So the cooling of the data centers is very important
01:46 using all this AI uses a ton of data.
01:50 So yeah, I would look outside of Nvidia
01:54 for a play on the data centers.
01:56 And one way to do that
01:58 is through a couple of companies actually.
02:00 You can look at the construction side
02:02 with a company like Sterling Infrastructure,
02:05 that's ticker S-T-R-L.
02:08 And it's a big,
02:10 it does everything on the infrastructure side though,
02:12 which I also like.
02:14 So we have the big infrastructure bill going on right now.
02:18 And that's gonna spread out for the next several years.
02:20 This is the trillion dollars that they're spending.
02:23 So it's not just going to the rails or the new bridges,
02:27 it's also going to things like broadband rolling out
02:30 in the rural areas.
02:31 They're spending, I think it's 500 billion
02:34 just on the broadband rollout.
02:35 So a company like Sterling will be a beneficiary of that.
02:40 And you can see from even just the chart
02:43 how much it's taken off
02:44 because we're getting a lot of the spending this year.
02:48 And it's a relatively cheap stock,
02:50 especially compared to Nvidia.
02:53 And then on the cooling side,
02:55 you might wanna look at something
02:57 like Modene Manufacturing, ticker M-O-D.
03:01 They're expected to see big jump in earnings this year
03:04 and next year.
03:05 They used to do a lot of cooling for autos,
03:10 but they also do cooling for commercial enterprises
03:14 like HVAC stuff.
03:15 And one of their big areas right now, surprise, surprise,
03:19 is the data centers.
03:20 And they talk about it on each of their last conference
03:24 calls, the last couple, they've mentioned the data centers.
03:26 Now they do have another segment of the business.
03:29 So it's not all data centers,
03:31 but the data centers is driving Modene.
03:35 You can see the charts look kind of similar
03:37 to what we're seeing with Nvidia,
03:39 but it's kind of like these hidden companies.
03:43 And then a third one you might wanna look at
03:45 is on the services side, and that's Vertiv.
03:49 I know this one's a little more well-known out there.
03:52 VRT is the ticker with that one.
03:55 I just recently bought this one for my own portfolio,
03:58 but I've owned it for most of this year
04:02 in Zach's value investor portfolio.
04:06 It's gotten a little more expensive,
04:08 but this is another one that's kind of mirroring Nvidia.
04:12 Even on the earning side, so everybody's going like,
04:15 "Oh, Nvidia earnings up over 200% this year,"
04:18 but so is Vertiv's because of the data centers
04:22 and their business is really booming in that.
04:25 And they've been beating and raising,
04:27 I think the last two quarters at least,
04:29 they've beaten and raised.
04:30 So I kind of, I look at Nvidia's earnings,
04:33 and then I expect in a couple months
04:36 when we get Vertiv again,
04:38 that they're gonna kind of mirror what Nvidia is saying,
04:41 because so far that's been the case.
04:44 They've been moving in tandem.
04:46 So those are just three.
04:48 There's gonna be others
04:49 that are also in these similar businesses,
04:52 but those are three I just managed
04:54 to stumble across this year
04:55 because those earnings have really turned around
04:59 and we're seeing the big growth on the earning side,
05:02 which really isn't showing up
05:03 in most other industries out there,
05:06 but the data centers, that's where it's at.
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