2 top growth stocks to buy and hold for the next twenty years to benefit from the AI ​​revolution

Artificial Intelligence (AI) is a revolutionary technology. And according to a PwC estimate, it could contribute as much as $15.7 trillion to the global economy by 2030. That is more than the current combined economic output of China and India.

The AI A revolution requires four factors to thrive: Renewable energydata centers, semiconductorsand computing capacity. This fits perfectly with the strategies of brothers and sisters Brookfield Renewable (NYSE: BEPC)(NYSE:BEP) And Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP). It makes them great growth stocks buy for those who want to take advantage of the unprecedented AI investment opportunity.

A staggering power vacuum

Brookfield Corporationthe parent company of Brookfield Renewable and Brookfield Infrastructure, has aligned its investment focus with several key megatrends. CEO Bruce Flatt wrote about the opportunities in the electricity sector in his second quarter letter to investors:

Flatt noted that the world will need an estimated 20,000 gigawatts (G.W) of energy generation capacity over the next twenty years to meet the world’s rising electricity needs. He then put that into perspective: There is currently about 8,000 GW of power generation capacity worldwide, almost half of which is highly carbon intensive (e.g. coal-fired) and will have to be retired. in the future. “Put another way,” Flatt wrote, “we need to more than double the current capacity (which one was largely built in the last 50 years) and at the same time about 50% of what we have replaced.”

That’s quite a job. However, Brookfield Renewable is ready for that challenge. It is one of the world’s largest builders of sustainable energy projects. It has more than 230 GW of projects owned or in various stages of development. It works directly with leading technology companies to meet the rising power needs of their customers AI and cloud companies. For example, it recently entered into a partnership with Microsoft to supply 10.5 GW of electricity in the coming years. That is eight times larger than the largest power purchase agreement ever signed by companies. However, it is only a small part of the 16,000 GW needed to meet future demand.

Seize big opportunities

Brookfield Infrastructure is trying to take advantage of the other side of the world AI demand drivers. In just a few years, it has grown into one of the largest data center builders in the world. It has acquired several data center platforms to increase its scale and expand its capacity.

The company currently has more than 135 data centers with approximately 750 megawatts (Mrs) of critical loading capacity. Its global platform has the potential to develop 2.5 GW of capacity in the coming years. That includes 1.4 GW already in operation or under contract for development. This robust development pipeline drives Brookfield’s vision that it can grow revenues from its data center platform alone 2.5x over the next three years.

Brookfield Infrastructure is also investing in the construction of two semiconductor manufacturing facilities in Arizona with Intel. The $30 billion complex will provide the necessary energy US with chips needed to run data centers AI and cloud computing applications.

These investments are likely just the beginning. Bruce Flatt wrote: “The computing power needed for algorithms to advance medical discoveries and industrial productivity is large. The amount needed to boost the computing power to train robotics toward intelligence closer to humans is enormous.” That suggests the world will need more data centers and more powerful chips to run these applications, which should provide many new investment opportunities for Brookfield Infrastructure in the coming decades.

Supercharged growth prospects

Brookfield Renewable and Brookfield Infrastructure each expect to grow their cash flow per share by more than 10% annually in the coming years. That should give them the power to increase their high-yield dividends (currently over 4% each) by 5% to 9% annually. Add their growing dividend income to their rapidly rising profits, and both companies could easily generate annualized total returns in their mid-teens. That makes them great ways to capitalize on the unprecedented AI-driven growth potential of renewable energy and computing power.

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Matt DiLallo has positions in Brookfield Corporation, Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, Brookfield Renewable, Brookfield Renewable Partners and Intel and has the following options: long January 2025 $30 calls on Intel, short January 2025 $30 puts on Intel, short November 2024 $45 calls on Intel, and short October 2024 $45 calls for Intel. The Motley Fool holds positions in and recommends Brookfield, Brookfield Corporation, Brookfield Renewable, and Microsoft. The Motley Fool recommends Brookfield Infrastructure Partners, Brookfield Renewable Partners, and Intel and recommends the following options: long January 2026 $395 calls to Microsoft, short August 2024 $35 calls to Intel, and short January 2026 $405 calls to Microsoft. The Motley Fool has one disclosure policy.

An Unprecedented Investment Opportunity: Two Top Growth Stocks to Buy and Hold for the Next 20 Years to Benefit from the AI ​​Revolution was originally published by The Motley Fool