Key Takeaways
- The immense power demands of artificial intelligence are creating a secondary investment theme in foundational infrastructure, benefiting specialist energy producers and grid equipment manufacturers.
- While Eli Lilly’s injectable GLP-1 drugs drive current growth, its long-term market dominance depends on navigating the complex clinical and commercial challenges of developing an oral alternative.
- Robinhood has successfully transitioned to profitability based on its core trading operations; its exploration of asset tokenisation represents a long-dated, high-risk venture rather than a near-term value driver.
- Highly speculative, capital-intensive ventures like direct-to-device satellite communication and humanoid robotics remain difficult to value, with binary outcomes dependent on technological viability and market adoption.
Identifying durable, long-term growth narratives requires looking beyond immediate market sentiment to the underlying structural shifts reconfiguring entire industries. While certain mega-cap technology and pharmaceutical names dominate headlines, a more nuanced examination reveals a web of interconnected opportunities. These range from the foundational infrastructure enabling the artificial intelligence boom to ambitious technological ventures aiming to redefine connectivity and labour. A careful analysis of these themes reveals distinct risk and reward profiles, separating tangible, cash-flowing businesses from more speculative, long-duration bets on future disruption.
The AI Ecosystem: From Silicon to Grid
The narrative surrounding artificial intelligence often centres on chip designers and software models. However, the operational reality of deploying AI at scale has created a powerful tailwind for companies providing the essential, and often overlooked, physical infrastructure. This ecosystem extends from the processing units themselves to the data centres that house them and, crucially, the electrical grid that powers them.
The Compute Layer: AMD
Advanced Micro Devices (AMD) continues to position itself as a credible alternative to Nvidia in the AI accelerator market. While Nvidia maintains a commanding lead in training large models, the landscape for AI inference—the process of using a trained model to make predictions—is more contested. Inference workloads prioritise efficiency and cost-effectiveness, creating an opening for AMD’s MI300 series accelerators. The company has guided for over $4 billion in data centre GPU revenue in 2024, a significant figure that underscores its growing traction with enterprise and cloud clients.1 The critical challenge remains execution and the pace of software ecosystem development to rival Nvidia’s CUDA platform.
The Power Layer: Constellation and Powell
The exponential growth in computing power translates directly into immense electricity consumption. Projections suggest that data centres could consume up to 9% of total US electricity generation by 2030, a substantial increase from 4% in 2022.2 This surge in demand benefits producers of reliable, 24/7 baseload power. Constellation Energy (CEG), as the largest producer of nuclear energy in the United States, is uniquely positioned to meet this need. Its fleet provides the carbon-free, high-availability power that technology giants increasingly require to meet both operational demands and sustainability goals.
This demand strains a national electrical grid that is, in many areas, antiquated. This creates a compelling case for companies like Powell Industries (POWL), which designs and manufactures the complex electrical equipment needed for power distribution and control. The company’s record backlog, which stood at $1.36 billion as of its second fiscal quarter of 2024, reflects powerful demand from utility, industrial, and increasingly, data centre clients.3 This is less a speculative bet on a new technology and more a direct play on the essential modernisation of critical national infrastructure.
| Company | Market Focus | Key Metric (Latest Quarter) | Core Tailwind |
|---|---|---|---|
| Advanced Micro Devices (AMD) | AI Accelerators | Data Centre Revenue: $2.3B (+80% YoY) | Growth of AI inference workloads |
| Constellation Energy (CEG) | Clean Energy Generation | Adj. EBITDA Guidance (FY24): $7.23B – $8.03B | Data centre electricity demand |
| Powell Industries (POWL) | Electrical Infrastructure | Record Backlog: $1.36B (+74% YoY) | Grid modernisation & electrification |
High-Risk Ventures in Technology and Finance
Beyond the tangible infrastructure build-out, several companies are pursuing disruptive technologies that carry both higher risk and potentially transformative rewards. These ventures often require significant capital investment and face considerable technological and regulatory hurdles before a clear path to profitability emerges.
The Future of Labour and Connectivity
Amazon’s (AMZN) investment in humanoid robotics, particularly through its trials with Agility Robotics’ Digit, represents a long-term strategy to automate warehouse logistics. While the vision of reducing reliance on human labour and improving operational efficiency is compelling, the technology is nascent. The path from pilot programmes to widespread, cost-effective deployment is fraught with challenges in hardware reliability, software intelligence, and human-robot interaction. For an enterprise of Amazon’s scale, this is a research and development initiative, not a near-term contributor to its bottom line.
In a similar vein, AST SpaceMobile (ASTS) is attempting to build the first space-based cellular broadband network capable of connecting directly to standard smartphones. The ambition is enormous: to eliminate global connectivity gaps. However, the company remains in a pre-revenue phase, burning capital to build, launch, and test its satellite constellation. While a successful test call using the BlueWalker 3 satellite was a critical milestone, the firm faces immense execution risk in scaling its network and securing sustainable commercial agreements with global telecommunication firms.4
Redefining Financial Access
Robinhood (HOOD) has recently achieved a significant milestone by reaching sustained profitability, driven by a recovery in trading volumes and higher interest income. For the first quarter of 2024, the company reported a net income of $157 million on revenues of $618 million, marking a stark turnaround from prior losses.5 Its “massive tailwind,” however, is often cited as the potential for asset tokenisation. This involves representing ownership of real-world assets like property or art on a blockchain, enabling fractional ownership and trading. While conceptually powerful, the regulatory and technical frameworks for tokenisation at scale are far from established. This remains a highly speculative, long-term project rather than a core component of its current, and newly profitable, business model.
Pharmaceuticals: The Next Phase of a Blockbuster
In the pharmaceutical sector, Eli Lilly (LLY) has established a formidable position in the treatment of diabetes and obesity with its dual GIP/GLP-1 agonists, Mounjaro and Zepbound. The drugs generated combined revenues of over $5 billion in the first quarter of 2024 alone, demonstrating staggering market adoption.6 The key future catalyst, and potential risk, lies in the development of an oral GLP-1 medication, orforglipron. An effective pill would dramatically expand the market by improving patient convenience and access. However, the clinical path is challenging, with hurdles in achieving sufficient bioavailability and managing side effects compared to injectables. Success would cement Lilly’s dominance for the next decade; failure or delay would open the door wider for competitors like Novo Nordisk and a host of emerging biopharmaceutical firms.
Ultimately, these varied opportunities highlight a critical distinction for investors. Some tailwinds, like the need for electricity and grid components, are tangible, measurable, and feeding directly into current revenues and backlogs. Others, such as humanoid robotics and asset tokenisation, represent compelling visions of the future that remain distant from commercial reality. The most astute allocation of capital may depend on discerning between the foundational requirements of today’s technological revolutions and the ambitious, but uncertain, promises of tomorrow’s.
References
1. Advanced Micro Devices. (2024, April 30). AMD Reports First Quarter 2024 Financial Results. AMD Investor Relations. Retrieved from https://ir.amd.com/news-events/press-releases/detail/1189/amd-reports-first-quarter-2024-financial-results
2. Electric Power Research Institute. (2024, May 14). Powering Intelligence: Analyzing AI’s Energy Consumption. EPRI. Retrieved from https://www.epri.com/research/products/000000003002027208
3. Powell Industries, Inc. (2024, May 7). Powell Industries Reports Fiscal 2024 Second Quarter Results. Yahoo Finance. Retrieved from https://finance.yahoo.com/news/powell-industries-reports-fiscal-2024-200500913.html
4. AST SpaceMobile, Inc. (2023, April 26). AST SpaceMobile Confirms Successful Voice Call Using an Unmodified Smartphone and the BlueWalker 3 Satellite. Business Wire. Retrieved from https://www.businesswire.com/news/home/20230426005417/en/AST-SpaceMobile-Confirms-Successful-Voice-Call-Using-an-Unmodified-Smartphone-and-the-BlueWalker-3-Satellite
5. Robinhood Markets, Inc. (2024, May 8). Robinhood Markets, Inc. Reports First Quarter 2024 Results. Robinhood Investor Relations. Retrieved from https://investors.robinhood.com/news/news-details/2024/Robinhood-Markets-Inc.-Reports-First-Quarter-2024-Results/default.aspx
6. Eli Lilly and Company. (2024, April 30). Lilly Reports First-Quarter 2024 Financial Results and Raises Full-Year Guidance. Eli Lilly and Company. Retrieved from https://investor.lilly.com/news-releases/news-release-details/lilly-reports-first-quarter-2024-financial-results-and-raises
