While artificial intelligence has fueled a surge in technology stocks this year, a little-known exchange-traded fund focused on power infrastructure is quietly outperforming the broader market, and analysts say its best days may still be ahead.
this TEMA Electrification ETF (VOLT) The index has soared 33% so far this year, significantly better than the S&P 500’s roughly 17% gain over the same period. Now, according to business insiderAnalysts at Ned Davis Research recommend the fund as an “overweight” investment, predicting it will outperform the S&P 500 by about 20% through 2027.
The fund’s thesis revolves around a simple premise: The AI boom will require massive amounts of electricity, and the companies that generate, transmit and support it will benefit the most. Pat Chosikchief theme strategist and analyst at Ned Davis Research philip morse VOLT is described as “the most direct diversified investment in the data center electrification theme” and has a large position in what they call “data center leaders” – those companies that can benefit the most from the construction of artificial intelligence infrastructure.
The fund’s heavy holdings include Powell Industries, next generation energyand Belle Face. As of October 31, the ETF held 29 stocks and had $168.3 million in assets under management. According to Tema.
The rationale behind Ned Davis Research’s bullish stance is based on two main factors. 1. Global Data center power demand expected to more than double According to the International Energy Agency’s forecast, electricity generation will increase from 415 TWh in 2024 to 945 TWh by 2030. In the United States, energy demand is expected growth The compound annual growth rate will be 15% by the end of the decade, with most of the demand coming from the commercial sector, which includes data centers.
The scale of energy demand has moved from prediction to reality. OpenAI’s Stargate data center projectFor example, it will span multiple states and require enough electricity to power major cities.
Second, America’s power infrastructure appears overdue for a major upgrade. American Society of Civil Engineers U.S. energy infrastructure rated D+ That grade dropped from a C- in 2021 on its 2025 report card. “We believe we are in a grid upgrade supercycle driven by data center demand and aging infrastructure,” Tschosik and Mouls said.
The investment comes as major tech companies accelerate spending on artificial intelligence infrastructure despite growing concerns about whether returns justify the spending. Amazon, Yuan, Microsoftand letter A total of $113.4 billion was spent Capital expenditures in the third quarter of 2025 increased by 73% year-on-year. They expect total spending in 2025 to be close to $400 billion, tens of billions more than previous forecasts, and expected to further increase 2026.
Some investors and economists suggest Similar to the dot-com bubblequestioning whether the massive spending on data centers and chips will yield the promised returns. However, the Chairman of the Federal Reserve Jerome Powell recently retorted In such comparisons, we point out that, unlike the speculative ventures of the late 1990s, current AI investments are backed by substantial returns and solid business models.
For VOLT, the spending boom translated into continued demand for the electrical equipment, utilities and energy infrastructure companies in its portfolio. Whether the artificial intelligence boom ultimately delivers on its transformative promise or hits roadblocks, the reality is clear: Data centers need power, and the companies that provide it are experiencing a surge in business that analysts expect will continue for years.
For this story, wealth Use generative artificial intelligence to help complete your first draft. Editors verified information for accuracy before publication.