3 U.S. AI infrastructure stocks with questionable earnings growth and cash flow

AI infrastructure stocks sit at the intersection of two powerful forces: real-world capability building and long-term adoption of artificial intelligence. Inflation trends, central bank policies, and energy markets continue to change, but the data centers, power, cooling, and connectivity that enable AI will always be in high demand. This screener focuses on companies that turn that demand into real cash flow, not just headlines. In this article, we introduce the three best stocks from our AI infrastructure stock screen and provide a clear explanation of what each company does and why different types of investors should be interested.

Western Digital (WDC)

overview: Western Digital is a long-established U.S. storage manufacturer that supplies hard drives and data storage platforms for data centers, PCs, and consumer devices in the Americas, Europe, the Middle East, Africa, and Asia, and works with partners on future quantum-enabled storage technologies.

operation: Western Digital generates approximately US$11.8 billion in revenue from its core hard disk drive division.

Market capitalization: 257.2 billion USD

Western Digital is at the heart of AI infrastructure. That’s because hyperscale cloud customers rely on the company’s high-capacity HDD and UltraSMR technology to store massive streams of AI-generated data. Recent performance has shown very strong earnings, broader margins and high return on equity. Multi-year commitments from large cloud customers, new AI-focused platform solutions, and post-quantum security capabilities expose the company to AI data center growth. The SanDisk spinoff also increased its focus on HDDs and related platforms. At the same time, Western Digital is a stock worthy of our screener’s scrutiny, as investors need to consider its heavy reliance on a small number of cloud customers, heavy use of external debt, insider sales, and questions about the quality of its cash flow.

Western Digital’s AI Storage story looks strong on the surface, but the real tension lies in customer concentration, leverage, and quality of cash flow, all of which are highlighted by 3 major perks and 2 key warning signs (1 is major!).

Jabiru (JBL)

overview: Jabil is a global manufacturing and engineering partner that designs and builds complex electronic hardware and embedded software for customers across 5G, cloud data centers, automotive, healthcare, and consumer devices, while also providing supply chain and fulfillment services.

Market capitalization: $39.2 billion

Jabil directly provides the physical construction of AI infrastructure, from cloud data center server platforms to optical components, and is supporting it with its expansion in India and new partnership with Adani to supply large-scale AI racks. Earnings have increased 49.4% over the past year, but the stock is already trading at a high P/E ratio that reflects considerable enthusiasm for AI. Combined with high debt, segment weakness in areas like renewable energy and EVs, and recent insider sales, Jabil represents a high-quality but promising AI manufacturing story that may deserve more attention.

Jabil’s 49.4% earnings growth, combined with its high P/E and large AI infrastructure exposure, raises some pointed questions. Is the optimism justified, or does it mask key pressure points with three major rewards and two important warning signs?

Fermi (FRMI)

overview: Fermi develops, owns, and leases private power campuses and high-performance computing sites in the United States, aiming to provide grid-agnostic power and data center-style infrastructure to AI-centric tenants such as hyperscalers and chip ecosystem companies.

Market capitalization: 6.1 billion dollars

Fermi provides a focused response to one of the toughest bottlenecks in AI infrastructure: long-term power consumption in energy-intensive data centers. This is underpinned by multi-gigawatt air permits and an 11 GW development plan at Project Matador. Analysts are currently modeling very large upside potential for revenue and earnings. The company remains unprofitable, borrowed from outside sources to finance large-scale construction, and is reporting significant losses. At the same time, the company has experienced leadership changes and public disputes with its co-founders over board control and strategic direction. For investors who can handle volatility and execution risk, Fermi sits at the intersection of scarce power capacity and growing AI demand. The key question is whether permitting, financing, and tenant profits can be converted into durable long-term cash flows.

Fermi’s large power permits and pre-revenue status create an unusual AI infrastructure story that many investors may be ignoring. And the real twist lies in 2 major rewards and 3 big warning signs (2 are big!).

This article’s three AI infrastructure stocks are just a starting point. The Full Screener surfaced an additional 46 companies whose cash flow profiles and business models align with the same strong story of building physical AI, all captured in the AI ​​Infrastructure Stock Screener. Use Simply Wall St to identify, analyze and filter these companies by the exact triggers and stories that matter to you, allowing you to focus on the opportunities with the highest conviction on this subject.

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Looking for new alternatives beyond AI infrastructure?

New ideas don’t stay in the spotlight for long. Take a look at these fresh groupings of stocks before the momentum flies and your ideal entry is captured by the crowd, and consider acting before they’re widely followed.

This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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