Powering The Future Amid The AI Surge
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Reports indicate that AI is a major force driving markets, with nearly 50% of S&P 500® earnings estimated to be directly or indirectly linked to AI.1 The narrative surrounding AI earnings and spending is largely focused on the infrastructure development necessary to support the anticipated productivity boom, particularly in data centers and the power infrastructure.
Growth of Data Centers and Power Infrastructure
As organizations increasingly depend on data-driven decision-making, demand for cloud computing is surging, leading to significant growth in the data center market. This market is projected to reach USD 584.9 billion by 2032, reflecting a compound annual growth rate of 11.7%.2 Global electricity demand from data centers is expected to more than double by 2030, with U.S. data centers anticipated to account for nearly half of the growth in electricity demand, contributing over 20% to the overall growth.3
To meet the growing energy demands of data centers and other technology-driven applications,4 U.S. electricity demand is projected to increase by 25% by 2030 and by 78% by 2050, compared to 2023 levels.5 This growth could have significant implications for the reliability and affordability of electricity, highlighting the urgency of building a robust power system. Research indicates that investments in U.S. power infrastructure are expected to total USD 1 trillion from 2025 through 2029.6
The substantial capital flowing into these infrastructure segments has attracted market attention, as their utilization rate will likely be an early sign of the fortunes of AI and its impact on the global economy. S&P Dow Jones Indices aligns with this trend by offering two indices that track these areas: the S&P Data Center, Tower REIT and Communications Equipment Index and the S&P U.S. Power Infrastructure Select Index.
S&P Data Center, Tower REIT and Communications Equipment Index
The S&P Data Center, Tower REIT and Communications Equipment Index measures the performance of developed market-domiciled, U.S.-listed organizations involved in the ownership and management of data centers, telecommunication towers and related equipment.
This index employs FactSet’s Revere Business Industry Classification System (RBICS) Focus data to select relevant companies, which are organized into two tiers: Data Center and Tower REITs, accounting for approximately 53% of the index, and Communication Equipment, comprising about 47% as of Sept. 20, 2025.
The index includes 25 constituents, with a substantial 94% weight attributed to U.S.-domiciled companies (see Exhibit 1). In terms of GICS® breakdown, most of the weight comes from the Information Technology and Real Estate sectors, accounting for 53.5% and 42.5%, respectively (see Exhibit 2).
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The S&P Data Center, Tower REIT and Communications Equipment Index has outperformed the S&P Telecom Select Industry Index over the past three years, though it has recently underperformed (see Exhibit 3). The outperformance was primarily driven by the relatively higher-weighted communications equipment companies, while the recent lag can be attributed to a higher weight in the underperforming Real Estate sector.
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S&P U.S. Power Infrastructure Select Index
The S&P U.S. Power Infrastructure Select Index tracks the performance of publicly traded companies from the S&P Composite 1500® that are involved in U.S. power infrastructure. This index employs RBICS to define companies related to U.S. power infrastructure and categorizes them into three sub-themes based on their revenue exposure: Power Transmission and Distribution, Energy Supply for Electrification, and Power Generation. These sub-themes encompass the entire industry’s value chain.
As of Sept. 30, 2025, the index comprised 66 constituents, with most of its weight coming from the Utilities, Industrials and Energy sectors. Notably, the Utilities sector accounted for nearly half of the total weight (see Exhibit 4).
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Compared to the S&P Composite 1500 Utilities, the S&P U.S. Power Infrastructure Select Index outperformed by 4.38% in annualized total return terms over the past three years, achieving an annualized return of 17.94% (see Exhibit 5). Since May, there has been a notable surge in performance, primarily driven by the strong performance of Electrical Equipment companies.
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Conclusion
As we enter a transformative era driven by AI, the demand for robust infrastructure—especially data centers and power systems—has become increasingly critical. The S&P U.S. Power Infrastructure Select Index and the S&P Data Center, Tower REIT and Communications Equipment Index serve as essential benchmarks for evaluating the performance of companies within these vital sectors that could be a window into AI adoption across the global economy.
1 Analysis-Investors on guard for risks that could derail the AI gravy train By Reuters
2 https://www.fortunebusinessinsights.com/data-center-market-109851
5 U.S. Demand Growth Forecast | ICF
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