The ETF built for the AI data center buildout: VOLT
An overlooked pocket of the market is riding AI infrastructure harder than the mega-caps. The Tema Electrification ETF (VOLT) is up 31% year-to-date in 2025, handily ahead of the S&P 500. NDR Research calls it the most direct diversified exposure to data center electrification and rates it Overweight versus the index.
Their team targets roughly 20% relative outperformance by 2027. The draw: higher concentration in utilities, grid equipment, and data center infrastructure suppliers than broad tech ETFs.
Why VOLT stands out
VOLT tilts into the picks-and-shovels of AI compute: power generation, transmission, distribution, and critical components. Top holdings include Powell Industries, NextEra Energy, and Bel Fuse - names levered to substation buildouts, transformers, switchgear, and grid reliability.
It's a way to express the AI theme without taking direct chip or hyperscaler risk. You're targeting the bottleneck most investors are underweight: electricity and the grid.
Two structural tailwinds supporting the thesis
- Growing electricity demand. Data centers are set to push power consumption higher for years. The IEA projects usage climbing from 415 TWh in 2024 to about 945 TWh by 2030, with US demand compounding near 15% annually over that stretch. Much of the lift sits in the commercial bucket (where data centers land), and flagship projects like OpenAI's Stargate point to city-scale loads (IEA).
- Need for new infrastructure. The US grid is old, stressed, and rated poorly by engineering bodies, underscoring a multi-year upgrade cycle. NDR characterizes this as a grid-upgrade super cycle driven by data center demand and aging assets (ASCE Infrastructure Report Card).
What to watch (practical signals for finance pros)
- Utility interconnection queues and average wait times for large loads (hyperscaler campuses).
- Rate cases and allowed ROE trends for regulated utilities with heavy transmission/distribution capex.
- Lead times and pricing for transformers, switchgear, and high-voltage equipment (margin tell for component makers).
- Transmission project approvals, permitting pace, and federal incentives affecting project backlogs.
- Hyperscaler capex run-rates and location strategies; watch guidance updates from Amazon, Meta, Microsoft, Alphabet, and Apple.
Positioning ideas
Use VOLT as a satellite to a core equity allocation if you want targeted exposure to the power constraint in AI. It complements chip and cloud holdings by leaning into the enabling infrastructure. Consider a rules-based approach to adds/trims keyed to interconnect data, capex plans, and equipment lead times.
If you already own utilities, check overlaps and factor tilts. VOLT's emphasis on electrification suppliers may offer a different risk/reward than a vanilla utility ETF.
Key risks to underwrite
- Capex digestion: hyperscalers moderate spending or delay campuses, pushing out order books.
- Regulatory friction: permitting bottlenecks, siting pushback, or less favorable rate decisions.
- Supply constraints: transformer and switchgear shortages delay revenue recognition.
- Rate sensitivity: higher-for-longer yields pressure regulated utility valuations.
- Theme crowding: flows chase performance, raising drawdown risk on any demand scare.
Why this matters now
Mega-cap tech plans to spend an estimated $349 billion in 2025 capex, much of it tied to chips and data centers. That money only works if the grid catches up. VOLT concentrates exposure where the bottleneck is most acute, which is why NDR pegs it for 20% relative outperformance versus the S&P 500 by 2027.
If the AI build continues on current trajectories, the electricity and infrastructure side should keep compounding earnings and backlog - and VOLT is built to capture it.
Further resources
- IEA: Data centres and data transmission networks
- ASCE: Energy Infrastructure Report Card
- AI tools for Finance: build faster research workflows
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