The 5 Stocks Powering the AI Infrastructure Buildout

The AI revolution cannot proceed without sufficient memory capacity, and Micron dominates that space as a leading memory provider to chip fabricators worldwide. The company significantly beat earnings and revenue estimates last week, then guided higher — a signal that demand continues to outpace supply. Nvidia, Micron's largest client, is demanding even more memory for its next-generation Rubin AI chip launching this year, followed by an enhanced version in the following year.

Despite trading up 40% year-to-date — and actually down from its highs after recent earnings — Mahn argues valuation concerns don't preclude further upside. The fundamental driver is clear: memory demand isn't going away, and Micron can't keep up with existing order flow. When forced to choose between Micron and Nvidia, Mahn picks Micron, viewing it as the essential enabler that the entire AI ecosystem depends on.

Vertiv entered the AI infrastructure conversation as a pick-and-shovels play, leveraging its long history providing HVAC solutions to office buildings and commercial properties. The company now serves as a backdoor AI investment by addressing the critical cooling challenge data centers face as they consume tremendous power and generate intense heat. Vertiv's core competency in thermal management translates directly to data center infrastructure needs.

The company's recent collaboration with Generate Capital represents a significant innovation: «power and cooling solutions in a box» — essentially turnkey, bring-your-own-power systems designed specifically for data centers. This modular approach allows for rapid deployment and scalability. Despite trading at rich valuations on both current and forward price-to-earnings metrics, Mahn sees continued growth potential. However, he acknowledges Vertiv faces the biggest valuation risk among the five picks, with increasing competition from companies like Modine Manufacturing and Comfort Systems, which recently attempted to acquire another cooling solutions provider.

L3 Harris stands apart from the other four picks as an aerospace and defense play that benefits from an entirely different spending wave: global military modernization. NATO countries have committed to spending up to 5% of their respective GDP on defense by the end of 2035, while President Trump plans to allocate up to $1.5 trillion to upgrade, modernize, and replenish U.S. military capabilities next year. The conflict in Iran has depleted U.S. missile and missile interceptor stockpiles, creating immediate replacement demand.

L3 Harris specializes in missile and missile interceptor systems, positioning it as a primary beneficiary if the United States pursues an Iron Dome-style missile defense capability similar to Israel's system. The company pays a dividend of approximately 1.3% and trades at less than 30 times forward earnings — not cheap, but not overly expensive relative to growth prospects. Importantly, Mahn identifies L3 Harris as his single favorite pick among the five if forced to choose, and the stock he'd buy if given only one selection, providing portfolio diversification beyond the concentrated AI infrastructure theme.