Bottom of the Stack: ETFs Fueling the AI Power Play

Markets have treated AI as a gold rush of LLMs, chips and cloud applications, but as the industry shifts from chatbots to agentic systems —  AI that autonomously runs workflows and makes decisions — hyperscalers are now facing a brutal physical bottleneck. Wall Street is waking up to the fact that code runs on computers, and advanced AI clusters require a massive, unprecedented amount of electricity.Reliable, cost-effective, and clean baseload electricity at scale is hard to come by. To keep data centers humming 24/7, tech giants are making a mad dash to lock in nuclear and grid contracts, elevating utilities and transmission operators into critical components of AI expansion. This structural shift is breathing new life into clean energy investments and fueling a historic nuclear renaissance. As a result, investors are increasingly looking past traditional tech holdings toward a new breed of thematic vehicles.Betting on the Power BottleneckElectrification infrastructure, which sits at the bottom of the AI stack, has become the critical foundation. Many infrastructure ETFs suffer from market-cap drift, ending up heavily weighted in the exact same mega-cap tech stocks that already dominate the S&P 500. But two thematic funds that sit squarely at the intersection of cutting-edge technology and raw power have emerged as compelling ways to express this theme.The Defiance AI and Power Infrastructure ETF (AIPO ) specifically targets the physical nexus of the data center buildout, capturing hardware, liquid cooling, and localized power generation. AIPO has surged more than 40% year-to-date, rapidly nearing $800 million in assets under management within its first full year of trading, thanks to intense institutional interest. Meanwhile, the ALPS Electrification Infrastructure ETF (ELFY ) plays the broader electrification economy, including electrical equipment manufacturers and the macroeconomic picks-and-shovel push to modernize the national transmission grid, posting a stellar 30% gain year-to-date and climbing nearly 50% over the trailing 12 months. By relying on a strict equal-weighted structure, ELFY insulates investors from mega-cap drift. By trimming top performers quarterly, the fund prevents a handful of tech giants from crowding out the pure-play utility, engineering, and real-asset infrastructure firms that are actually winning the grid modernization contracts.Navigating the Nuclear ETF SpectrumAs the nuclear renaissance gains momentum, advisors and investors must recognize that the investment thesis for powering AI splits into two distinct operational profiles: upstream commodity supply and downstream grid infrastructure. Choosing where to allocate capital across the spectrum is a function of where you want to sit in the energy value chain. The Global X Uranium ETF (URA B-) remains the giant of the sector with more than $7 billion in total assets. Attracting more than $850 million in recent net inflows, the fund balances major mining giants with broader nuclear component integrators. The Sprott Uranium Miners ETF (URNM ) stands out as an aggressive, tightly targeted commodity play. URNM’s mandate requires constituents to derive at least 50% of their revenue directly from uranium mining, exploration, development or holding physical uranium. The $2 billion fund captures maximum price sensitivity to the raw commodity itself, driven by the structural deficit in global uranium supply. The Range Nuclear Renaissance Index ETF (NUKZ ) encompasses the full nuclear value chain, with a particular emphasis on construction and equipment companies. NUKZ, which tracks the VettaFi Nuclear Renaissance Index, heavily favors Industrials (~48%) and Utilities (~31%), rather than the uranium mining names in the Energy or Materials sectors. As the world builds new reactors, the equipment supply chain stands to benefit but is often underowned by other strategies. The $835 million fund also includes developers of small modular reactors (SMRs), which have benefitted from partnerships with hyperscalers. NUKZ provides exposure to the buildout of AI-related power infrastructure, as well as broader global tailwinds for the adoption of nuclear power.The Clean Energy ComebackMeanwhile, clean energy has quietly staged a powerful rebound of its own. Global renewable energy ETFs hauled in over $3 billion in fresh net cash in April alone — marking the strongest monthly inflow for the sector since January 2021 and propelling total global clean energy ETF assets to $43 billion. To capture this diversified renewable rebound, investors are turning to the ALPS Clean Energy ETF (ACES B) —  which tracks a market-cap-weighted index of North American clean energy players across solar, wind, storage, and grid-management software. ACES has staged a powerful recovery, up 20% year-to-date.Bottom LineThe next phase of the AI trade belongs not to the software developers, but to the power providers. By looking to the bottom of the stack, investors can position themselves ahead of the grid. In this new market regime, the ultimate winners won’t just be the companies writing the code, but those building and powering the infrastructure behind it. For more news, information, and analysis, visit the Thematic Investing Content Hub. VettaFi LLC (“VettaFi”) is the index provider for ELFY and NUKZ, for which it receives an index licensing fee. However, ELFY and NUKZ are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of ELFY or NUKZ.