Data Centre Boom Electrifies Utility Shares

Listen to this quote which echoes my sentiments exactly.

Nvidia is sporting growth one tech CEO says hasn’t been seen ‘in the history of capitalism’

MarketWatch, 25 May 2024

I have mentioned this before. Investors are worried that Nvidia employees are becoming so rich they do not need to work and therefore might retire to sail around the world on their yachts. I don’t think many will. CEO and co-founder, Jensen Huang, is worth $80bn plus and still puts in a solid shift. What could be more fun than changing the world by working at Nvidia and roaring home at the end of the day in your Ferrari or Tesla Model S to your beachside home?

The latest results were so stunning that I suspect investors are in shock.

Revenue of $26bn was up 18pc sequentially and up 262pc year-on-year and well above our outlook of $24bn.

Data Centre revenue of $22.6bn was a record, up 23pc sequentially and up 427pc year-on-year, driven by continued strong demand for the NVIDIA Hopper GPU computing platform. Compute revenue grew more than 5x and networking revenue more than 3x from last year.

Colette Kress, CFO, Nvidia, Q1 2025, 22 May 2024

Nvidia’s Numbers Are Insane

Every word in the latest Nvidia quarterly reports points to raging growth.

Training and inferencing AI on NVIDIA CUDA is driving meaningful acceleration in cloud rental revenue growth, delivering an immediate and strong return on cloud provider’s investment. For every $1 spent on NVIDIA AI infrastructure, cloud providers have an opportunity to earn $5 in GPU instant hosting revenue over four years. NVIDIA’s rich software stack and ecosystem and tight integration with cloud providers makes it easy for end customers up and running on NVIDIA GPU instances in the public cloud.

For cloud rental customers, NVIDIA GPUs offer the best time to train models, the lowest cost to train models and the lowest cost to inference large language models. For public cloud providers, NVIDIA brings customers to their cloud, driving revenue growth and returns on their infrastructure investments. Leading LLM companies such as OpenAI, Adept, Anthropic, Character.AI, Cohere, Databricks, DeepMind, Meta, Mistral, xAI, and many others are building on NVIDIA AI in the cloud.

Colette Kress, CFO, Nvidia, Q1 2025, 22 May 2024

The Latest Growth Driver is Sovereign AI

From a geographic perspective, Data Centre revenue continues to diversify as countries around the world invest in Sovereign AI. Sovereign AI refers to a nation’s capabilities to produce artificial intelligence using its own infrastructure, data, workforce and business networks.

Nations are building up domestic computing capacity through various models. Some are procuring and operating Sovereign AI clouds in collaboration with state-owned telecommunication providers or utilities. Others are sponsoring local cloud partners to provide a shared AI computing platform for public and private sector use.

For example, Japan plans to invest more than $740m in key digital infrastructure providers, including KDDI, Sakura Internet, and SoftBank to build out the nation’s Sovereign AI infrastructure. France-based, Scaleway, a subsidiary of the Iliad Group, is building Europe’s most powerful cloud native AI supercomputer.

In Italy, Swisscom Group will build the nation’s first and most powerful NVIDIA DGX-powered supercomputer to develop the first LLM [large language model] natively trained in the Italian language. And in Singapore, the National Supercomputer Centre is getting upgraded with NVIDIA Hopper GPUs, while Singtel is building NVIDIA’s accelerated AI factories across Southeast Asia.

NVIDIA’s ability to offer end-to-end compute to networking technologies, full-stack software, AI expertise, and rich ecosystem of partners and customers allows Sovereign AI and regional cloud providers to jumpstart their country’s AI ambitions. From nothing the previous year, we believe Sovereign AI revenue can approach the high single-digit billions this year. The importance of AI has caught the attention of every nation.

Colette Kress, CFO, Nvidia, Q1 2025, 22 May 2024

New developments are coming at warp speed.

In the first quarter, we started shipping our new Spectrum-X Ethernet networking solution optimized for AI from the ground up.

It includes our Spectrum-4 switch, BlueField-3 DPU, and new software technologies to overcome the challenges of AI on Ethernet to deliver 1.6x higher networking performance for AI processing compared with traditional Ethernet.

Spectrum-X is ramping in volume with multiple customers, including a massive 100,000 GPU cluster. Spectrum-X opens a brand-new market to NVIDIA networking and enables Ethernet only data centres to accommodate large-scale AI. We expect Spectrum-X to jump to a multibillion-dollar product line within a year.

At GTC [Nvidia’s GPU Technology Conference] in March, we launched our next-generation AI factory platform, Blackwell. The Blackwell GPU architecture delivers up to 4x faster training and 30x faster inference than the H100 and enables real-time generative AI on trillion-parameter large language models.

Blackwell is a giant leap with up to 25x lower TCO [total cost of ownership] and energy consumption than Hopper. The Blackwell platform includes the fifth-generation NVLink with a multi-GPU spine and new InfiniBand and Ethernet switches, the X800 series designed for a trillion parameter scale AI.

Blackwell is designed to support data centres universally, from hyperscale to enterprise, training to inference, x86 to Grace CPUs, Ethernet to InfiniBand networking, and air cooling to liquid cooling. Blackwell will be available in over 100 OEM [original equipment manufacturer] and ODM [original design manufacturer] systems at launch, more than double the number of Hopper’s launch and representing every major computer maker in the world. This will support fast and broad adoption across the customer types, workloads and data center environments in the first year shipments.

Blackwell time-to-market customers include Amazon, Google, Meta, Microsoft, OpenAI, Oracle, Tesla, and xAI. We announced a new software product with the introduction of NVIDIA Inference Microservices or NIM.

Colette Kress, CFO, Nvidia, Q1 2025, 22 May 2024

The Next Industrial Revolution Has Begun

Listen to what Jensen Huang had to say.

The next industrial revolution has begun.

Companies and countries are partnering with NVIDIA to shift the trillion-dollar installed base of traditional data centres to accelerated computing and build a new type of data centre, AI factories, to produce a new commodity, artificial intelligence.

AI will bring significant productivity gains to nearly every industry and help companies be more cost and energy efficient while expanding revenue opportunities. CSPs [cloud services providers] were the first generative AI movers. With NVIDIA, CSPs accelerated workloads to save money and power. The tokens* generated by NVIDIA Hopper drive revenues for their AI services. And NVIDIA cloud instances attract rental customers from our rich ecosystem of developers.

Strong and accelerating demand for generative AI training and inference on Hopper platform propels our Data Centre growth. Training continues to scale as models learn to be multimodal, understanding text, speech, images, video and 3D and learn to reason and plan.

Our inference workloads are growing incredibly. With generative AI, inference, which is now about fast token generation at massive scale, has become incredibly complex. Generative AI is driving a from-foundation-up full stack computing platform shift that will transform every computer interaction.

From today’s information retrieval model, we are shifting to an answers and skills generation model of computing. AI will understand context and our intentions, be knowledgeable, reason, plan and perform tasks.

We are fundamentally changing how computing works and what computers can do, from general purpose CPU to GPU accelerated computing, from instruction-driven software to intention-understanding models, from retrieving information to performing skills, and at the industrial level, from producing software to generating tokens, manufacturing digital intelligence.

Token generation will drive a multiyear build-out of AI factories. Beyond cloud service providers, generative AI has expanded to consumer Internet companies and enterprise, Sovereign AI, automotive, and health care customers, creating multiple multibillion-dollar vertical markets.

From Blackwell to Spectrum-X to NIMs [NVIDIA NIM enables fast and easy generative AI development and deployment for the thousands of healthcare and life sciences companies using AWS. Harnessing optimised AI models for healthcare is easier than ever as NVIDIA NIM, a collection of cloud-native microservices, integrates with Amazon Web Services.], we are poised for the next wave of growth.

*Generative AI models break down text data into units called tokens for processing. The way text data is converted into tokens depends on the tokeniser used. A token can be characters, words, or phrases.

Jensen Huang, CEO and co-founder, Nvidia, Q1 2025, 22 May 2025

All you have to do with Nvidia is believe the chart, the numbers and the story. The sky is the limit for this business. The widespread fear that GenAI generally and AI stocks especially are a tulipmania bubble is nonsense.

As a reminder, my three musketeers for the AI revolution are Super Micro Computer, Vertiv and Dell Technologies with Nvidia playing the role of D’Artagnan.

How the data centre boom is driving explosive growth at electricity utilities.

Constellation is the nation’s largest producer of carbon-free energy and the leading competitive retail supplier of power and energy products and services for homes and businesses across the United States. Headquartered in Baltimore, our generation fleet powers more than 20m homes and businesses and is helping to accelerate the nation’s transition to clean energy with more than 32,400 megawatts of capacity and annual output that is 90pc carbon-free. Constellation has set a goal to eliminate 100pc of its greenhouse gas emissions by 2040 by leveraging innovative technology and enhancing its diverse mix of hydro, wind and solar resources paired with the nation’s largest carbon-free nuclear fleet. Constellation’s family of retail businesses serves approximately 2m residential, public sector and business customers, including three-fourths of the FORTUNE 100. 

Constellation Energy, website

Nuclear Energy Provides the Backup to Variable Renewables

Constellation is a nuclear energy business. Wow!

This is a phenomenally exciting company.

Constellation will grow base earnings by at least 10pc through the decade. And importantly, we have a number of opportunities to generate base earnings above those levels in the coming years. The demand for clean, reliable megawatts will only grow, and we think we’re best positioned to meet growing demand for clean energy, to tackle the challenge of the energy transition, to unlock value through compensation for the uniquely clean and reliable attributes of our 180m megawatt hour fleet, and to help America power the technologies of the future, whether that be EV’s electric heating and industrialization, where we’ve got a lot to go, or in the booming demand for artificial intelligence technologies and other digital infrastructure projects.

I’d like to drill down on that last point for a moment. Over the last few months, a lot has been written about power demands in the technology industry. But I want to assure you that these challenges will be overcome as they have in the past, because we all know here how imperative is for America’s national security and economic competitiveness that the US lead the world in the development of these technologies. And we’re working hard every day to make that possible. The data economy and constellations nuclear energy go together like peanut butter and jelly.

And as such, we’re in advanced conversations with multiple clients, large, well known companies that you all know about powering their needs. Speed to execution is important to them, as it is to us. But these are large and complicated transactions that require diligence and time to finalise. And while we’re not done yet, I do expect that we will finalise agreements that will have long term and transformational value.

Joseph Dominguez, Constellation Energy, Q1 2024, 9 May 2024

Nuclear energy seems to be taking off in the USA.

State legislatures have 130 bills out there to support nuclear energy this year, compared to five to ten historically. States like Michigan and Minnesota have passed laws moving renewable standards to clean energy standards, which include nuclear.

Joseph Dominguez, Constellation Energy, Q1 2024, 9 May 2024

The company is eager to look after shareholders.

In March, we entered into a $350m accelerated share repurchase agreement, bringing our total repurchases to $500m year-to-date. We have now executed $1.5bn of share repurchases since the first quarter of 2023, buying back approximately 13.5m shares in total. Having completed half of the billion dollar authorization from December, we’re happy to announce that our board authorized an incremental $1bn, bringing the total program to $3bn. We will remain opportunistic with the remaining $1.5bn authorization and still see our stock as attractive.

Daniel Eggars, CFO, Constellation Energy, Q1 2024, 9 May 2024

I have much to learn about this business but I will buy a stake and see how things develop.

Power demand is growing and at the same time, reliability is becoming a premium product and there is no more reliable power source than nuclear. Increased demand combined with the change of the electric system to be more dependent on intermittent, non dispatchable resources means that we’re going to see continued volatility and increased volatility for years to come. This presents an opportunity for us to drive additional value for our owners.

In short, we think Constellation is a big part of the solution to America’s energy supply. Our clean, reliable nuclear plants, coupled with our ability to offer customers what they need, will support the energy transition and our national security. And that’s why Republicans and Democrats recognize that nuclear is the backbone of the electric system today and will be tomorrow.

And that support continues to grow on top of the opportunities we have from continued volatile power markets. And we’ve certainly seen movement in power markets. We have more than 180m megawatt hours of carbon free electricity that we produce annually that can receive additional compensation through 24/7 clean attributes behind the meter opportunities government procurements for clean energy and capturing prices above the PTC [production tax credit] floor levels as we see increases in power prices as demand continues to ramp. These opportunities are on top of the 10pc growth we have in our plan. Our task is to capture the additional opportunities as they unfold and to do better than our plan for our owners.

Joseph Dominguez, CE, Q1 2024, 9 May 2024

Vistra (NYSE: VST) is a leading Fortune 500 integrated retail electricity and power generation company that provides essential resources to customers, businesses, and communities from California to Maine. Based in Irving, Texas, Vistra is a leader in the energy transformation with an unyielding focus on reliability, affordability, and sustainability. The company safely operates a reliable, efficient, power generation fleet of natural gas, nuclear, coal, solar, and battery energy storage facilities while taking an innovative, customer-centric approach to its retail business.

Vistra, web site

The business is strong.

Vistra’s performance has much in common with Constellation with electricity demand ramping up dramatically and strong free cash flow funding aggressive share buyback programmes.

We continue to execute on our capital return plan put in place during the fourth quarter of 2021. Since that time, we’ve returned to our investors approximately $4.6bn, including $3.9bn of share repurchases through May 3rd of this year.

We continue to view our shares as an attractive investment and expect to execute at least $2.25bn of share repurchases throughout ’24 and ’25. Crucially, our balance sheet remains strong, enabling the ongoing capital return plan.

Jim Burke, CEO, Q1 2024, 8 May 2024

Multiple Additional Drivers of Demand

The demand outlook is strong.

There has been much discussion in recent months about the substantial power demand growth forecasts, including from the potential build out of data centres and other sources of electricity demand.

Third party research indicates data center related activity could approach 35 gigawatt of additional demand by 2030. However, our teams also see multiple additional potential drivers of demand in the geographies we serve.

These drivers include continued reshoring of industrial activity, as evidenced by multiple large chip manufacturing site build outs, partially due to the CHIPS Act*, increased electrification of commercial industrial and residential load across the country, as evidenced by the expectation of approximately 20 gigawatts of additional power demand in West Texas by 2030, and strong population growth, particularly in the state of Texas, which has been steady at 1.5pc to 2pc per year.

With these drivers, we see the potential demand outcome skewing higher, albeit with a wider range. In their most recent report, PJM’s load growth expectations through 2030 doubled from their 2023 estimate. [PJM is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia.]

In Texas, recent reports from ERCOT suggest load growth through 2030 in a wide range, from as low as 1.6pc per year to as high as 6pc growth per year, or even higher, if more than half of the large loads recently discussed at ERCOT actually materialize.

The trailing 10 years has been approximately 2.5pc, and that was before some of these more recent drivers of the Permian electrification, the CHIPS Act, and the data centre demand. This increase in demand across the country will need to be served by an electric grid that will continue to see coal plant retirements in all markets.

The Inflation Reduction Act will continue to incentivise wind, solar, and battery resources, and we will also need gas fire generation to back up those intermittent sources. The new greenhouse gas rules issued from the EPA [Environmental Protection Agency] on April 25th are expected to make it more challenging to economically build baseload combined cycle gas turbine facilities. But we expect those rules to be litigated, and it’s unclear what the final outcome will be.

Natural gas peakers could be a solution that threads the needle of environmental rules and demand needs. In addition, it is likely that existing assets will need to run at higher capacity factors to meet overall annual energy needs as more coal retires. We see Vistra’s well positioned for these trends given our diversified portfolio of reliable and sustainable assets in growing markets.

*The CHIPS and Science Act is a U.S. federal statute enacted by the 117th United States Congress and signed into law by President Joe Biden on August 9, 2022. The act authorizes roughly $280bn in new funding to boost domestic research and manufacturing of semiconductors in the United States, for which it appropriates $52.7bn. The act includes $39bn in subsidies for chip manufacturing on U.S. soil along with 25pc investment tax credits for costs of manufacturing equipment, and $13bn for semiconductor research and workforce training, with the dual aim of strengthening American supply chain resilience and countering China.

Jim Burke, CEO, Q1 2024, 8 May 2024

The implications for further share buybacks are positive.

Like the 2024 guidance, our long-term outlook excludes any potential benefit from the Nuclear PTC and we will continue to evaluate the appropriate timing for including any of that potential benefit.

Even without the inclusion of any PTC benefit, the improvement in near-term and long-term outlook for Vistra is expected to result in a meaningful amount of unallocated capital through 2026.

Jim Burke, CEO, Q1 2024, 8 May 2024

I am feeling my way with these power generation companies but I think the next quote is important.

So what’s been very interesting, David, about our discussions with potential partners is we have normally sort of tried to search for opportunities for us to find partners and bid into their energy needs. Now this has been reversed. We actually have partners, potential partners coming to us directly. And speed is really very important to them. I would say gas has become as interesting to many of them as nuclear has, in fact, even a preference for some. So from our standpoint, all options are on the table with 40,000 megawatts.

And, you know, we’ve got obviously 12 states and 40,000 megawatts that we can do some of our projects with. But we’ve actually flipped it a little bit. So we’ve actually put out some RFPs* ourselves. So instead of just responding to the inbounds, we’ve actually gone out to the marketplace to handle actually multiple conversations simultaneously and see what the best opportunity might be for us. And so that process is not concluded yet, but we’re in the middle of that process. And we’re very excited about the interest. Of course, you can imagine the hyperscalers, the co-locators, and the specific developers are in that process. We’re dedicating a ton of time to it, as I am personally.

And it’s probably been the most exciting development for our industry, you know, in quite some time. But we think we can be a great partner to one or more capable parties because of the size of the fleet and multiple geographies. And I don’t know yet which one’s going to happen first. But it’s a it’s a huge opportunity set for us, David, one that I think we’re going to be making really good progress on here shortly.

*The procurement process includes issuing a request for proposal (RFP) to energy suppliers, evaluating their proposals, negotiating a contract and managing the ongoing energy supplier relationship.

Jim Burke, CEO, Q1 2024, 8 May 2024

Powell is a customer-focused, technology-driven, and solutions-oriented company offering single point sourcing to our customers, no matter how diverse the project.

Powell Industries web site

The market for these energy companies is changing.

Another slide to help me get my head around what Powell does.

Business is strong.

New orders in the quarter totaled $235m, reflecting another strong quarter of bookings and in line with our expectations of a normalized but still elevated cadence of awards. Notably, there were no mega projects included in our second quarter bookings. Rather, the $235m of orders is comprised of a strong volume of small- and medium-sized awards that speak to our core competencies and well-balanced across our markets.

Our revenue in the quarter grew 49pc to $255m, driven mainly by strong performance from our largest markets, Oil and Gas and Petrochemical, which grew 66pc and 93pc, respectively, compared to the same period of fiscal 2023. As our operations have ramped to meet the demand of higher overall project volumes, we remain focused on project execution and operational efficiencies. Many of the initiatives and process improvements put into place during the lean quarters of the pandemic continue to work well as we are benefiting today from improved and more efficient manufacturing operational processes. These streamline operations also helped to create additional capacity while also delivering attractive returns for our stakeholders.

Our gross profit was very strong in the quarter, growing 88pc versus the same period in the prior year, leading to a gross profit of 24.6pc of revenue or 510 basis points better than the prior year. We are also benefiting from the quality of our backlog as it carries a more favorable margin profile than that of recent years. This is mainly driven by a higher share of Industrial projects where Powell’s core expertise and competencies lie, and conversely, a more selective share of work, which tends to carry a lower margin profile due to either the nature of how this type of work is awarded or content less favorable to our strength of handling complex heavier engineering requirements.

While we are, of course, always conscientious of how we utilise our resources to pursue and quote projects, Powell’s focus on custom engineered-to-order solutions for complex projects means that we rarely aspire to win projects on price. Rather, the value we provide is our industry-leading track record for both our product technology and our project expertise, and that we deliver for our customers on every project.

The strength of our engineering teams is equally important as it enables us to be closer to the customer throughout the project life cycle, allowing us to adapt quickly as project requirements, scope and timing change, while fostering healthy long-term customer relationships. On the bottom line, we recorded net income of $33.5m or $2.75 per diluted share, which was roughly 4 times higher than the $8.5m or $0.70 per diluted share in the year-ago period. Our backlog remains near the highest in Powell’s history and was roughly flat sequentially at $1.3bn. 

Brett Cope, CEO, Powell Industries, Q2 2024, 1 May 2024

As with the others data centre business is having an impact.

Activity within our Commercial and Other Industrial markets also remains attractive. Revenue in this segment grew 57pc this quarter. Over the past several quarters, the growth in this sector has been driven by our growing presence in the data center market and has mostly been driven by a limited amount of the total value that we could offer. We believe that the strong growth that we have seen so far in this fast-growing market for Powell has a larger potential as we continue to qualify more of our products and services for the future of this important end market.

We have primarily served the outside connection of the data centre to the grid and see the potential for further penetration within the 4 walls of the data center where Powell can provide increased value.

In addition, sales to data centre customers have generally been smaller in scale and focused on individual products. However, as data centres grow in both physical size and computing power, the electrical energy demanded by these facilities will only grow in scale. As a result, the power solutions required by data centres will also grow in sophistication and require companies like Powell to build customized and fully integrated solutions within a single power control room to ensure the reliability and uptime performance of the servers to store and secure the data. We are prepared for this future and are building relationships with both hyperscalers as well as co-locators to better understand the power demands of these facilities to deliver Powell’s engineer-to-order solutions for these customers.

Brett Cope, CEO, Powell Industries, Q2 2024, 1 May 2024

They are generally bullish.

Lastly, the outlook for our Utility market is among the most positive in recent years. Powell has grown to become a leading provider of utility distribution substations. These types of projects remain core to our results in this market, but recently, we have seen the return of new-generation work. Helped by the increasing electrical power demands, such as data centres, it is clear that overall power generation capacity across the U.S. must grow in the coming years. We are optimistic that we are beginning to see the initial stages of an increase in utility projects to meet this expected demand. The quality of projects we are seeing in this market remain favorable as does our ability to secure new orders on the projects we pursue.

Brett Cope, CEO, Powell Industries, Q2 2024, 1 May 2024

Strategy – Build Exposure to a Booming US Electrical Energy Sector

These three shares have had an incredible run in the last couple of years and could pull back anytime. I have looked at a longer-term chart of Powell Industries and flattened it to show how it might look if the shares went much higher. From that perspective what we are seeing could be an explosive chart breakout.

This ties in with the fundamentals. What happens to these shares is more exciting than anything that has happened before.

I also looked at an ETF containing Constellation Energy which presented an explosive picture.

I found another amazing chart of Japanese share, Hitachi.

In April 2022, Hitachi formulated the Mid-term Management Plan 2024 targeting further global advances and growth in the Social Innovation Business based on three pillars of growth: digital, green and innovation. To increase management efficiency and speed, we simplified our structure, grouping together businesses with similar characteristics organized into three sectors: Digital Systems & Services (DSS), Green Energy & Mobility (GEM) and Connective Industries (CI).

HitThe graphic below illustrates what they do.achi website

I have never read anything so boringly crammed with statistics as the Hitachi quarterly report but here is one clue that exciting things are happening.

On the other hand, the emergence of generative AI is also rapidly increasing demand for data centres, as you all know well. In addition to hybrid clouds, Hitachi will provide power receiving, transforming and cooling facilities. Based on our recently announced partnership with NVIDIA, we will step up investment in the development of Hitachi iQ, a highly reliable data management solution.

Keiji Komina, CEO, Hitachi, Q 4 2023, 26 April 2024

Here is a little bit more about what is going on at Hitachi.

With the dividend increase this year, the 13-year dividend growth rate is now 12pc. We increased our shareholder returns while adjusting the dividend level to match the company’s sustainable growth. Next is on growth investments. Investments have been executed or decided upon mainly in the form of medium-scale M&As [mergers and acquisitions] to strengthen individual businesses around JPY 800bn. We will expand our growth investments in order to generate further cash without slowing down the pace of growth. In addition to strengthening individual businesses, we expect to invest JPY 1 trillion to capture new growth opportunities. So during the MMP [mid-term management plan] 2024 period, we had big events, which is the emergence of generative AI and the drive of DX and GX [digital transformation and green transformation]. The market expansion in the marketing manufacturing sector, driven by DX and GX. In addition, the orders and backlogs in the Social Infrastructure business promoted by Hitachi Group are expanding significantly.

Opportunities are also being created to servitize the business by combining strong products and OT knowledge with digital technologies [The servitization business model offers a distinct value proposition compared to traditional business models based on ownership]. By focusing on providing access, functionality, and desired outcomes, servitization fosters long-term customer relationships and continuous product innovation.. All of these are new growth opportunities for Hitachi Group and present significant opportunities for sustainable growth. With the emergence of generative AI, productivity is improving and IT infrastructure is expected to expand. Software productivity improvement will help to resolve the shortage of engineers. It will improve work efficiency in requirement definition, design and test processes and also improve quality by reducing human error. We will concentrate our investment in building capacity to utilise generative AI with a focus on GlobalLogic. In addition, 80pc of our global working population is active as frontline workers. Improving the productivity of frontline workers is an area where Hitachi can fully utilise our IT, OT [operational technology] and product strength. And we will actively invest in this area, including the development of industrial metaverse.

On the other hand, the emergence of generative AI is also rapidly increasing demand for data centres, as you all know well. In addition to hybrid clouds, Hitachi will provide power receiving, transforming and cooling facilities. 

Keiji Komina, CEO, Hitachi, Q 4 2023, 26 April 2024

Hitachi is not the easiest company to understand but I think it is exciting. When the Japanese put their mind to something we know that they do it very well and the overall Japanese stock market is strong.

Share Recommendations

Nvidia NVDA. Buy @ $1119 (10:1 share split takes effect 10 June)

Super Micro Computer SCMI. Buy @ $897

Vertiv VRT. Buy @ $106

Dell Technologies. DELL Buy @ $166.7

Constellation Energy Corporation. CEG. Buy @ $231

Vistra. Corp. VST. Buy @ $106

Powell Industries. POWL. Buy @ $201

Nuclear Renaissance ETF. NUKZ. Buy @ $34.43

Hitachi 6501. Buy @ Yen15,945 (US$102)