Raoul Pal: AI Data Center Supercycle Is Nearly Certain, Three Stocks Stand to Benefit

Macro investor Raoul Pal said on Monday that data center construction is running at less than one-third the pace required by the AI race, and the risk of U.S.-China competition makes a larger capital expenditure "supercycle" almost inevitable.

"This Is Almost Certainly a Supercycle"

"Data center buildout is only about 30% complete relative to where it needs to be," Pal said in a post on X.

"The U.S. and China are in a race that neither side can afford to lose. And no frontier AI lab can be allowed to win outright... that's too dangerous."

He argued that bottlenecks won't slow construction; they'll accelerate it, because supply constraints only demand more spending on power, infrastructure, and capital expenditure.

"Put it all together," Pal said, "and this is almost certainly a supercycle."

According to data from Swiss Re Institute, the five largest U.S. hyperscalers are expected to spend over $800 billion on AI-related capital expenditure in 2026, while global data center capex is estimated to exceed $1 trillion.

Record Spending Growth

According to data shared by The Kobeissi Letter, U.S. data center construction spending rose 57% year-over-year in July, hitting a record annualized $75 billion, following a 46% increase in June—the fastest consecutive acceleration since mid-2025.

Since early 2021, that spending has grown by $66 billion, a 717% increase, while all other private construction spending—including residential, office, and retail—has fallen by $120 billion over the same period.

Futurum Group's Daniel Newman pushed back against the growing skepticism around construction, saying: "The narrative that keeps circulating against data centers stands in stark contrast to reality," noting that July's record 57% year-over-year growth is evidence that the buildout "is continuing and accelerating."

Stocks Poised to Ride the Data Center Wave

As construction accelerates, several construction and infrastructure companies stand to benefit, including Sterling Infrastructure Inc., Comfort Systems USA, and Quanta Services Inc.

Data center-related construction stocks have performed well.

Price action: Sterling Infrastructure closed up 5.75% on Friday at $486.49, and rose another 6.18% in early pre-market trading on Tuesday. According to Edge rankings, Sterling Infrastructure stock holds a momentum score in the 71st percentile and a growth score in the 55th percentile.