Canada’s artificial-intelligence (AI) boom is no longer waiting politely in a government strategy document. Concrete is being poured, power has been contracted, and an alarming number of electricians are about to become more important than chatbots.
Bell has two operational data centres in British Columbia, its 300-megawatt (MW) Saskatchewan facility is under development, and Meta has secured electricity for a massive Alberta project. Canada’s data-centre buildout has begun, which means the next opportunity may sit outside the companies buying all those expensive computer chips.
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More than servers
A data centre is essentially a factory for computing. Servers perform the work, but also demand enormous amounts of uninterrupted electricity and produce enough heat to make cooling a full-time occupation. The facility then needs transformers, backup systems, transmission connections, construction crews, and acres of physical infrastructure.
Natural Resources Canada estimates electricity demand from AI data centres could reach three to five gigawatts by 2030. One gigawatt (GW) can equal the output of a large power plant, so Canada isn’t merely adding another commercial building category. It’s creating a new class of industrial electricity customer, which is attracting investors toward the companies supplying the power and equipment.
CPX
Capital Power (TSX: CPX) owns and operates power-generation facilities across Canada and the United States. Its mix includes natural gas, wind, solar, and other generation assets capable of supplying the dependable electricity that data centres require around the clock.
The opportunity became much more tangible in July. Capital Power stock signed an agreement to provide 250 MW of capacity and energy for Meta’s Sturgeon County data centre in Alberta. The contract runs for more than 10 years, is expected to begin in the second half of 2028, and requires no new capital investment from Capital Power stock.
Second-quarter adjusted funds from operations (AFFO) reached $328 million, up from $235 million a year earlier. At writing, the newly increased annual dividend of $2.8 yields roughly 4.3%. That provides income while investors wait for Meta’s contract and potentially more hyperscale customers to begin contributing.
Of course Capital Power stock isn’t a risk-free AI shortcut. It reported a quarterly net loss, carries debt from recent acquisitions, and remains exposed to electricity prices, outages, and regulation. The Meta load also won’t arrive until 2028. Still, the agreement shows why dependable Canadian utility stocks could become unlikely winners from rising computing demand.
HPS
Hammond Power Solutions (TSX: HPS.A) plays further inside the AI space. The Guelph-based company manufactures transformers and related electrical equipment that convert power into the correct voltage for data centres, factories, renewable projects, and other industrial customers.
Demand has already hit its financial statements. Second-quarter sales jumped 44.7% year over year to a record $325 million, while backlog finished 96.9% above the prior-year level. Data-centre projects have driven much of that growth, suggesting Hammond isn’t merely preparing for the buildout. It’s already shipping into it.
The problem is that investors have noticed. Hammond trades at roughly 28 times annualized first-half adjusted earnings at writing. That’s a demanding valuation for an industrial manufacturer, particularly while it integrates AEG Power Solutions and absorbs acquisition and foreign-exchange costs. A project slowdown or weaker margins could produce a fairly dramatic reset.
Bottom line
Investors don’t need to choose which AI model eventually wins every office argument. They can follow the physical bottlenecks that every model shares. Capital Power stock offers contracted electricity and a dividend, while Hammond provides faster growth through essential electrical equipment, giving buyers two very different ways to approach Canadian growth stocks.
Canada’s data-centre race has moved from announcements to construction, yet much of the required power infrastructure still hasn’t been built. If today’s projects become the first wave rather than the entire boom, the companies keeping those facilities powered may have considerably more work coming.
