The giant data center model that powers nearly every artificial intelligence tool, cloud service, and app is beginning to crack.
What’s replacing it is a piece of hardware the size of an air conditioning unit and three “Homestack” Mini Data Center Stocks are the infrastructure behind it.
The Teaser
We may just be hearing about it now, but the “Homestack” story started in the fall of 2021.
Angel Publishing is the independent financial publisher behind such investment teasers as Trump’s Secret Stock Buying List and 4 Tiny Gold Stocks for Generational Wealth.
It touts itself as being “ahead of the curve with regards to investment foresight” and this pitch is definitely forward looking.
The main premise is replacing the $7 trillion data center buildout that has been fueling the AI boom.
A big reason why is The Dalles story.
It goes a little something like this, in late 2021 reporters at The Oregonian, Portland’s main local newspaper, wanted to know how much water Google was draining out of The Dalles city reservoir.
Google’s very first data centers were built there in 2006, so the relationship was a long and mutually beneficial one, neither side wanted to rock the boat.
The Oregonian had to fight The Dalles in court for disclosure, with the city arguing, incredibly, that residents had no right to know what was happening with their own water supply.
The court disagreed and when the records finally came out, they showed that Google’s data centers were consuming close to a third of the city’s entire water supply.
This is just one small city in a single state out of the 50 that now host data center facilities.
Altogether, these now consume approximately 4.4% of total U.S. electricity and somewhere around 1% of total water supply.
If we extrapolate these figures out to when most data centers will be completed and operating, the numbers are unsustainable. In other words, the math stops mathing.
Add to this the fact that 61% of Americans are now against having a new data center constructed near them and the buildout is on the verge of stalling.
This is where the “Homestack” comes in and three companies are ahead of everyone else on it.
The Pitch
All the names have been assembled and revealed in a single research report called “The Homestack Portfolio: Three Little-Known Stocks Built for the Mini Data Center Boom.”
Unlike most teasers that attempt to lure you into long-term subscriptions, this is an exclusive, limited-time offer for the report above, for a one-off cost of $99.
What in the World is a “Homestack?”
A box that looks like an air conditioning unit.
From the outside looking in, this is the first thing that comes to mind.
Of course it’s much more than a piece of hardware the size of an air conditioning unit bolted to the side of a house.
A “Homestack” is a mini data center sized for a single home, packed with sixteen of Nvidia’s newest top-tier AI chips, four server-grade processors. A massive bank of memory, a battery big enough to run an entire home during a blackout, and a sealed liquid cooling system that uses no city water and makes no noise. That last part is important and a selling point.
The major benefits are:
- One-fifth the cost of a traditional data center
- Six times the speed of construction
- No water or waiting line for a power station
Not only this, but participating homeowner’s who agree to install a Homestack unit can pay less for their monthly electricity and internet bills, around $150 a month all in.
A Winning Model?
According to the laws of physics, the current AI data center model cannot compete.
The typical project takes 4-7 years to build, requires 2 million-5 million gallons of water per day to run, as well as a dedicated high-voltage power station the local utility has to approve, build, and switch on.
However, the biggest differentiator is cost.
A 100 megawatt (MW) data center costs upward of a cool $1 billion up front, according to industry construction data.
By comparison, a 100 MW Homestack network spread across 8,000 small units is roughly one-fifth the cost.
The economics are hard to argue with, which is why Nvidia is backing the private company behind the Homestack, Span, and the first 100 units are now going into new homes in Arizona and Nevada.
The opportunity here is the supply chain and owning a piece of the three companies building the network behind Homestack.
Revealing Angel Publishing’s “Homestack” Mini Data Center Stocks
Three companies, each with a specific role.
Let’s start with the first, which makes the physical housings that Homestacks sit in.
The Housing Play
- Every Homestack lives inside a weatherproof, industrial-grade unit and in November 2024 this company paid $695 million to buy a business that specifically builds utility-grade outdoor housings.
- It already had a relationship with Nvidia, co-designing an official hardware blueprint with Siemens specifically for Nvidia AI data centers.
The name we’re looking for here is nVent Electric plc (NYSE: NVT).
- In Q4 2024 nVent paid exactly $695 million for Trachte, a manufacturer of prefabricated steel buildings for equipment protection.
- nVent and Siemens previously collaborated on a liquid cooling and power reference architecture, purpose-built for Nvidia AI data centers.
The Comeback Play
- The Homestack needs a complete home-energy system – battery storage, smart home-energy software, and controls. This company owns all three layers.
- It has quietly built more than $700 million in backlog for data center backup-power systems, including a non-binding agreement worth up to $600 million with one of the big five hyperscalers.
Based on the second clue, Generac Holdings Inc. (NYSE: GNRC) is the pick.
- Generac reported a current backlog of more than $700 million in Q1 and a $600 million non‑binding notice to proceed for 2027 deliveries with not one, but two hyperscaler customers.
The Stress Test
- Whether home-based computing takes off or takes longer, this company wins.
- It’s a publicly traded power company with heavy exposure to the Texas power market.
- The company already has long-term power purchase agreements signed with two of the big five hyperscalers.
This one was tougher, but it fits the description of RWE AG (OTC: RWEOY) to a tee.
- RWE’s clean energy segment has a base of over 10 gigawatts of wind, solar and battery projects across the U.S., including a couple in the state of Texas.
- It has long-term power purchase agreements in place with Meta and Google, among others.
Big Money From Compact Computing?
Energy and natural resources are AI’s biggest bottleneck.
It’s been well-documented with various solutions put forth, from onsite behind-the-meter power generation to orbital data centers in space, powered and cooled by the elements.
Mini data centers capable of distributing compute demand is the latest proposed fix to the problem.
The biggest argument in favor of them is cost.
Mini data centers cost less to build and maintain than a traditional data center and orbital data centers, respectively.
Timing may also be on their side.
AI is beginning to move from its compute-intensive initial training phase to its less power hungry inference stage. Mini data centers are tailor-made for lighter AI inference tasks, which will make up the vast majority of compute going forward.
So overall, Angel Publishing’s thesis does make sense. But will its picks make us dollars?
I checked out the balance sheets, profitability, and return on capital of all three of it’s “Homestack” picks.
All have similar underlying economics, 40-50% debt/equity ratios, a forward P/E in the mid/high teens (only nVent is higher at 25x), and a return on invested capital (ROIC) of between 5-10%, respectively. Nothing special.
However, given RWE’s positioning, if mini data centers become the new compute power standard, it wins big. If they don’t, it still doesn’t lose. I’m going with “the hedge” as the best way to play the mini data center story out of these three.
Quick Recap & Conclusion
- Angel Publishing believes giant data centers will be replaced by a piece of hardware the size of an air conditioning unit and three “Homestack” Mini Data Center Stocks are building the infrastructure behind it.
- A “Homestack” is a mini data center sized for a single-family home that is one-fifth the cost of a traditional data center, can be built at six times the speed, and has no water or power station requirements.
- Three companies are building the infrastructure behind it and their names are revealed in a single research report called “The Homestack Portfolio: Three Little-Known Stocks Built for the Mini Data Center Boom.” The report is an exclusive limited-time offer for a one-off cost of $99.
- We went through the entire teaser for clues and found enough to reveal all three little-known stock picks. They are nVent Electric plc (NYSE: NVT), Generac Holdings Inc. (NYSE: GNRC), and RWE AG (OTC: RWEOY).
- Mini data centers are starting to be installed in new homes and if the concept takes off, or even if it doesn’t, RWE AG is a decent pick.
Would you install a mini data center on your property? Let us know in the comments.