AI Boom Continues, Drives Tech Sector Earnings and Jobs Growth
The AI trade has rebounded with investors betting on sector leaders, driving big tech earnings and spurring data center growth. Data center job postings have tripled in the past two years, and big tech companies are expanding recruitment beyond Silicon Valley. AI is also changing jobs, with robotics and manufacturing supply chain emerging as areas for growth.
AI stocks rebounded sharply this week as investors rotated back into the trade, . Part of the move reflects an unwind of crowded positioning built up earlier in the year rather than fresh fundamental news .
Hiring data shows how far the buildout has spread past software. Data center roles now account for roughly 6 of every 1,000 US job postings, up from about 2 per 1,000 in May 2023, with pay premiums well above comparable non-data-center work ,. That recruiting is concentrated in the states hosting the capacity.
Power is the binding constraint. Elon Musk argues AI demand exceeds what the US grid can supply, and has built the Colossus data centers around off-grid generation including a natural gas plant in Mississippi . New data center connection requests in Texas have exceeded five times statewide peak demand, and both Texas and New York have imposed construction moratoriums . Meta META CTO Andrew Bosworth told staff that AI productivity gains should go into building more product, not more time off , a signal that employers are capturing the surplus.
Watch interconnection queues, state permitting decisions, power purchase announcements from MSFT and AMZN, and whether data center hiring holds when capex guidance is refreshed.
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