Power Grid Investments
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In the past we've written about how power is the bottleneck of the AI buildout. It is also the recipient of fiscal spending and infrastructure reshoring. Last week, Trump invoked the Defense Production Act for grid infrastructure, equipment, and supply chain capacity.
Trump’s Determination treats the US power grid as critical to national defense. It authorizes federal funds to expand capacity. This includes electrical components like transformers, conductors, high‑voltage circuit breakers, capacitor banks, and so on.
Without federal action, US industry cannot quickly and reliably produce these items. That production capability was moved offshore to China long ago. This act seeks to bring capital investment back into domestic manufacturing.
“That order found that America’s inadequate energy production, transportation, refining, and generation constitutes an unusual and extraordinary threat to the Nation’s economy, national security, and foreign policy.
…ensuring the domestic capability for development, manufacturing, and deployment of large-scale energy and energy-related infrastructure is essential to United States national defense, yet due to financing risks, regulatory delays, and market barriers, these cannot be met in full under existing market conditions.”
-Presidential Determination, Apr 20
Shortage of electrical componentry is not a new story. Due to data center demand, the lead time to deliver a transformer has reached >24 months. That backlog is set to grow even further.
For example: GE Vernova, a maker of such equipment, is seeing their backlog continue to accelerate in Q1/2026:
The announcement provided a big boost to component manufacturers like HPS.A and ETN:
The US stock market and economy is being driven by price-indiscriminate fiscal spending. This also ties in with the manufacturing resurgence idea we highlighted last week. These are the themes and tailwinds that we seek to gain exposure to in our portfolios.
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