Invest in Infrastructure: AI Fuels Brookfield, Equinix, Kinder Morgan

A report details the growing demand for data centers driven by AI technology, spotlighting Brookfield Infrastructure, Equinix, and Kinder Morgan as key beneficiaries. Their investments in infrastructure and natural gas positions them well for future growth.

Date: 30-09-2024

AI Rating: 8

Investment Implications of AI Demand

The report indicates a significant megatrend in investing, with artificial intelligence (AI) driving demand for data centers. This surge necessitates robust energy and data solutions, favoring companies like Brookfield Infrastructure, Equinix, and Kinder Morgan.

Brookfield Infrastructure Insights

Brookfield estimates that approximately 60% of its funds from operations (FFO) are linked to the digitalization trend. With expected FFO growth of over 10% annually, the company is positioned to see 5% to 9% growth in dividends as it capitalizes on the burgeoning demand from data centers, which will significantly increase energy consumption over the next decade.

Highlights from Equinix

Equinix's strategy involves major investments totaling $3 billion annually until 2027, aimed at expanding its global data center footprint. By accomplishing a 7% to 10% annual increase in adjusted FFO per share, Equinix is likely to deliver substantial dividend growth, benefiting from the growth in cloud and AI workloads.

Kinder Morgan's Growth Prospects

Kinder Morgan also stands out due to its natural gas infrastructure, crucial as gas demand grows. With a $1.7 billion pipeline expansion underway and a backlog supporting natural gas demand, Kinder Morgan's robust asset base will generate increased cash flow and maintain a strong dividend payout of over 5%, having raised its dividends consistently for seven years. This positions the company favorably in the context of the ongoing energy transition.

Overall Outlook

The report indicates an urgent need for investment in infrastructure to support AI, suggesting considerable growth for Brookfield Infrastructure, Equinix, and Kinder Morgan, making them attractive stock purchases in the current market environment.

Stocks: BIPC BIP EQIX KMI