AI Data Centers Expose U.S. Grid Gaps, Boost Electrification ETFs

AI data centers that run machine-learning workloads require uninterrupted, round-the-clock power, highlighting weaknesses in the U.S. electrical grid, ALPS’ Q2 2026 Market Themes to Watch report says. The shift in investor interest from headline AI names to physical power infrastructure has coincided with gains in several electrification-focused ETFs, according to ETF Database.

The ALPS Electrification Infrastructure ETF (ELFY) targets 18 subindustries tied to upgrading and building the grid across utilities, industrials, energy, technology, materials and select consumer discretionary firms. ELFY has returned 27.3% year to date and 12.2% over the most recent month, per ETF Database. Top holdings listed include Bloom Energy Corp., Applied Optoelectronics Inc., Powell Industries Inc. and Argan Inc. The fund holds about $183.7 million in assets and carries a 0.50% expense ratio.

The ALPS Nautilus SMR, Nuclear & Technology ETF (SMRF), launched in February, focuses on the nuclear value chain and companies involved with small modular reactors. ETF Database reports a 16.5% gain for SMRF over the past month. The fund’s largest positions include Oklo Inc., Energy Fuels Inc., National Atomic Co., NexGen Energy and Uranium Energy Corp. ALPS and other industry observers point to growing interest from large technology firms considering nuclear options to supply steady, high-capacity power for proprietary data centers.

The ALPS Clean Energy ETF (ACES) provides exposure to renewable generation and firms that support electrification across industries. ETF Database shows ACES up 12.3% year to date and up 8.79% over the most recent month. Top holdings include Plug Power, HA Sustainable Infrastructure Capital, Albemarle, Nextpower and First Solar. Companies in ACES supply technologies and materials for battery storage, solar deployment and hydrogen production.

Market observers note that AI data center demand, supply-chain reshoring and rising consumer electrification are increasing competition for limited grid capacity. That competition affects companies involved in transmission and distribution upgrades, generation expansion and energy storage across traditional utilities, industrial equipment makers, nuclear developers, battery and materials suppliers, and solar and hydrogen firms.

VettaFi LLC serves as the index provider for ELFY and SMRF and receives index licensing fees. VettaFi is not the issuer, sponsor, endorser or seller of those funds and has no obligation related to their issuance, administration, marketing or trading. ETF Database provided the reported holdings and returns.