In this article, we will look at the 10 Best Grid Modernization Stocks to Buy for AI Infrastructure.
AI infrastructure is starting to look less like a pure data-center story and more like a grid-capacity story. Data centers are still the visible layer, but the strain is moving upstream into transformers, substations, switchgear, transmission lines, power-management systems, and grid-edge software. The International Energy Agency said global electricity demand from data centers rose 17% in 2025, while electricity use from AI-focused data centers surged 50%, far above the 3% growth in global electricity demand. The agency also expects data centers to account for about half of U.S. electricity demand growth through 2030.
That pressure is already showing up in grid equipment markets. Reuters reported on May 11 that U.S. demand for generator step-up and substation transformers has climbed 274% and 116%, respectively, since 2019, while transformer prices have risen about 80% over five years, and lead times for large units can stretch to four years. Companies exposed to electrification hardware, power delivery, grid construction, and utility modernization are therefore becoming part of the AI infrastructure supply chain. Recent moves from ABB and GE Vernova show the same pattern: AI-driven electricity demand is feeding orders and capacity expansion for grid equipment, not just servers and chips.
Methodology
We identified grid modernization stocks with direct exposure to AI-driven electricity demand, including companies tied to switchgear, transformers, substations, transmission construction, power management, grid-edge intelligence, and utility capex. We ranked the list in descending order by the short percentage of float, sourced from stockanalysis.com.
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10. Itron, Inc. (NASDAQ:ITRI)
Short Percentage of Float: 11.53%
Itron, Inc. (NASDAQ:ITRI) is one of the best grid modernization stocks to buy for AI infrastructure.
On April 28, Itron, Inc. (NASDAQ:ITRI) said its first-quarter results came in ahead of expectations, helped by strong execution and some projects running ahead of schedule. The company reported $587 million in revenue, adjusted EBITDA of $92 million, and total backlog of $4.4 billion at quarter-end. More importantly for this list, Itron said utility customers are prioritizing resiliency and affordability, calling the multi-year trend to add intelligence to the grid “structural.” Its Outcomes revenue rose 22% year-over-year, while its newer Resiliency Solutions segment contributed $16 million after the addition of Urbint and Locusview.
That puts Itron in the software and grid-edge layer of AI infrastructure rather than the heavy-equipment layer. As utilities face higher loads from data centers, electrification, and distributed energy resources, they need better forecasting, real-time visibility, demand response, and construction management tools. Itron’s January 29 grid-edge update also said its portfolio had shipped more than 16 million distributed-intelligence-enabled meters, managed more than 100 million endpoints, and dispatched more than 70 GWh of flexible customer load and generation in 2025.
Itron, Inc. (NASDAQ:ITRI) provides intelligent infrastructure products and services for utilities and cities, including smart meters, communications networks, grid-edge intelligence, analytics software, distributed energy resource management, demand response, and related energy and water management solutions.
9. Powell Industries, Inc. (NASDAQ:POWL)
Short Percentage of Float: 11.32%
Powell Industries, Inc. (NASDAQ:POWL) is one of the best grid modernization stocks to buy for AI infrastructure.
On May 4, Powell Industries, Inc. (NASDAQ:POWL) said it was awarded a data center order worth more than $400 million after the end of its fiscal second quarter, calling it the largest order in company history. The order is tied to a behind-the-meter design of on-site generation assets, which makes it directly relevant to AI infrastructure’s power bottleneck rather than just general industrial demand. Powell also booked a mega electric utility order and a mega data center order during the quarter, each worth more than $75 million.
The numbers support the same grid-modernization angle. Powell reported $490 million in new orders, up from $249 million a year earlier, while backlog rose 33% year-over-year to $1.8 billion as of March 31, 2026. The company said demand from data center buildouts, AI capacity growth, and future power demand should remain supportive for its commercial and electric utility end markets. For investors, that puts Powell Industries, Inc. (NASDAQ:POWL) in the electrical distribution and control layer needed to support large-load AI infrastructure.
Powell Industries, Inc. (NASDAQ:POWL) designs, manufactures, and services custom-engineered equipment and systems used to distribute, control, monitor, and protect electrical energy across utility, industrial, commercial, oil and gas, petrochemical, and other infrastructure markets.
