Data centers are being built at less than a third of the pace the AI race demands, macro investor Raoul Pal said on Monday, with the stakes of the U.S.-China rivalry making an even larger capital spending “supercycle” all but inevitable.
‘There Is Almost No Way This Isn’t a Supercycle’
“Data centers are roughly 30% built versus where they should be by now,” Pal said in a post on X.
“The US and China are in a race nobody is allowed to lose. And no single frontier AI lab can be allowed to win… it’s too dangerous.”
He argued that bottlenecks won’t slow the buildout; they’ll accelerate it as supply constraints only demand more spending on power, infrastructure, and capital expenditure.
“Put that together,” Pal said, “and there is almost no way this isn’t a supercycle.”
The five largest U.S. hyperscalers are expected to spend more than $800 billion on AI-related capital expenditure in 2026, while global data-center capital expenditure is estimated to exceed $1 trillion, according to Swiss Re Institute.
Record Spending Growth
U.S. data center construction spending surged 57% year-over-year in July to a record annualized rate of $75 billion, according to data shared by The Kobeissi Letter, following a 46% increase in June, the largest back-to-back acceleration since mid-2025.
Spending has risen $66 billion, or 717%, since the start of 2021, even as all other private construction, including housing, offices and retail, has declined $120 billion over the same period.
Futurum Group’s Daniel Newman pushed back on growing skepticism around the buildout, saying, “The constant anti-data center narrative many people are reading is in stark contrast with reality,” pointing to the record 57% year-over-year growth in July as evidence the buildout “continues and is accelerating.”
Stocks Riding the Data Center Buildout
A few construction and infrastructure companies are positioned to benefit as the buildout accelerates, including Sterling Infrastructure Inc. (NASDAQ:STRL), Comfort Systems USA (NYSE: FIX), and Quanta Services Inc. (NYSE:PWR).
| COMPANY | YTD | 1 YEAR | 5 YEARS |
| Sterling Infrastructure | Up 52.43% | Up 69.68% | Up 2,126.50% |
| Comfort Systems USA | Up 60.45% | Up 124.95% | Up 2,145.94% |
| Quanta Services | Up 42.01% | Up 66.27% | Up 439.21% |
Price Action: Sterling Infrastructure closed 5.75% higher on Friday at $486.49 and gained 6.18% in early pre-market trading on Tuesday.
Benzinga edge rankings indicate Sterling Infrastructure’s stock has a Momentum score in the 71st percentile and a Growth Score in the 55th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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