UBS identifies the next main theme for AI trading: electricity, data centers, and key resources

The AI investment narrative is shifting from model development to infrastructure construction. UBS points out in its latest research report that power supply, data center capacity, and financing ability are becoming the core variables driving the next stage of AI trading, with the market’s focus moving from model competition to whether infrastructure can be delivered in time.

UBS energy and resources expert Catherine Gordon summarized this trend in a recent report as “AI infrastructure constraints emerging as the next stage of trading”. She notes that recent long-term power purchase agreements (PPAs) signed by Alphabet and Amazon further highlight the importance of power supply for AI expansion, and have made infrastructure assets a continued focus of the market.

Although the market still has concerns about the sustainability of AI capital expenditure and the financing of infrastructure, industry feedback continues to show resilient demand. The current key issue is not just whether AI demand will materialize, but whether the supply side can keep pace with the speed of deployment.

Supply bottlenecks and execution capability determine the next stage of AI investment

Gordon points out that the brief skepticism around OpenAI’s revenue expectations once stirred market volatility, but the core logic of AI investment remains whether infrastructure construction can match demand. Power availability is especially under scrutiny, and the long-term PPAs signed by Alphabet and Amazon further emphasize the market’s focus on constraints in energy supply.

Recent industry exchanges at the Singapore Data Center World Expo similarly show that attendees are more concerned about whether the supply chain can rapidly scale up capacity, rather than any substantial decline in end demand. This means that as AI infrastructure continues to expand, project delivery speed, supply chain security, and execution capability may become key factors affecting corporate competitiveness and investment returns.

This trend also extends into the realm of critical raw materials. UBS’s analysis aligns with the “investing in bottleneck assets” approach: focusing on companies that control key materials and can meet demands for grid expansion, data center construction, manufacturing reshoring, and defense investment, with rare earths and tungsten as typical examples. As infrastructure investment continues to grow, companies that control supply of scarce raw materials are likely to attract greater attention from investors.