Nov 4, 2026 · 32 min
Data centers offer investors a steadier bet than election headlines
Investing lately? It's tricky! How to move past fear and uncertainty
The episode connects political uncertainty and rate expectations to a disciplined approach for finding durable opportunities without impulsive portfolio changes.
- 1Data-center expansion may benefit infrastructure, energy, industrials, landowners, and hyperscalers more than semiconductor stocks.
- 2Leo Nelissen treats memory chips as a commodity business and favors thesis-driven, top-down analysis over short-term earnings surprises.
- 3ETFs can provide most investors with diversification while reducing the research burden of individual stock selection.
Don't miss
Leo redirects the data-center investment story away from semiconductor stocks toward the physical infrastructure, energy, engineering, and land required to build it.
The brief
Leo Nelissen of Main Street Alpha explains his big-picture investing framework as markets process the midterm elections, shifting rate expectations, and persistent political uncertainty.
His data-center thesis looks beyond the obvious chipmakers, pointing instead to engineering firms, landowners, energy companies, midstream infrastructure, and other physical beneficiaries of expansion.
The discussion’s sharpest contrarian point is his long-standing caution toward semiconductor stocks, especially memory producers, where capacity additions can make pricing difficult.
Nelissen describes a concentrated, top-down portfolio built around physical stagflation, with growth broadening into transportation, materials, industrials, and other cyclical areas.
The practical takeaway is restraint: use earnings to test an investment thesis, rely on ETFs when research time is limited, and do not let political headlines rewrite the plan.
What was said on this episode
39 statements · 29 positive · 8 negative · 1 mixed · 1 neutral
Falling rates and oil prices may support broader economic growth.
“the market is now saying, okay, we may go back to a scenario where the economy is broadening again because rates are coming down, all prices are coming down, which is a good thing for the economy.”
Listen at 5:25
Leo rejects expectations of a major slowdown in AI data-center construction.
“We think it's complete nonsense to expect a big slowdown in the AI data center built out.”
Listen at 7:05
Big tech companies will spend hundreds of billions on data centers next year and afterward.
“these big tech companies, they know they're going to spend hundreds and hundreds of billions next year and more after that.”
Listen at 7:24
Off-grid data centers may supply excess energy to residential customers.
“if they produce more energy than they need. and deliver to residential customers. That's one way to do it.”
Listen at 7:42
The market has overreacted to AI and will rebalance over time.
“we also think the market has overreacted on the AI end, and we will see some balancing over the next few weeks, months, or longer term.”
Listen at 8:16
Comfort Systems USA remains attractive because data-center construction continues.
“And that's a company I like because the build-out is still happening. We still need these engineering companies.”
Listen at 9:28
Leo likes Comfort Systems USA at its current valuation.
“So I like them at current valuations.”
Listen at 9:52
Vertiv is a strong stock benefiting from data-center cooling demand.
“The same Vertif is a great stock, data center cooling.”
Listen at 9:56
Recent selloffs create an opportunity for income investors to invest.
“And I think this is a great opportunity, for example, for income investors to put some money to work.”
Listen at 11:04
LandBridge is Leo's largest investment.
“And personally, my biggest investment in general is Landbridge”
Listen at 11:16
LandBridge's off-grid data-center projects will not be canceled.
“These plants are not getting scrapped, especially not off-grid plants.”
Listen at 12:01
Leo has become more bullish on LandBridge after the election news.
“So that's why I'm actually more bullish on LandBridge than I was yesterday”
Listen at 12:09
Semiconductor capacity will remain constrained for two more years.
“the capacity is still expected to be in shortage for two more years.”
Listen at 13:28
Semiconductor prices will eventually fall sharply when supply returns.
“prices of semiconductors will probably plummet by quite a bit, by a lot.”
Listen at 14:03
Leo sees little long-term investment appeal in semiconductor stocks.
“I don't see the long-term appeal in these semiconductor stocks.”
Listen at 14:46
Hyperscalers offer attractive opportunities within technology.
“What I do see in the technology sector is opportunities in hyperscalers.”
Listen at 14:49
Amazon and Google shares fell after earnings.
“Amazon, for example, sold off just, I think it was slightly more than, or even 2% after earnings. And Google sold off 13%.”
Listen at 15:39
Amazon can largely fund data-center expansion through operating cash flow.
“Amazon is one of these companies that can mostly fund the build-out using operational cash flow”
Listen at 16:03
Leo is very bullish on Amazon, a top-four portfolio holding.
“Amazon is a top four position of mine. Very bullish on it.”
Listen at 17:30
Leo is very bullish on Amazon.
“Very bullish on it.”
Listen at 17:33
Economic growth is returning and broadening across sectors.
“economic growth is coming back, is broadening”
Listen at 18:22
Trucking capacity reductions preserve pricing power and support prices.
“the trucking companies, they reduce capacity a lot just to preserve pricing power. And that's very bullish for pricing”
Listen at 18:44
Leo is bullish on all five major public North American railroads.
“For me, there are two. On the one hand, you have railroads. There are five. major public railroads in North America. I'm bullish on all of them.”
Listen at 19:49
Leo is bullish on all five major North American public railroads.
“I'm bullish on all of them.”
Listen at 19:57
Union Pacific's merger could benefit economic reshoring.
“Union Pacific is working on a merger that could create the first transcontinental railroad in the US, which is very bullish for economic onshoring”
Listen at 20:02
Union Pacific's proposed merger would support economic reshoring by improving speed.
“which is very bullish for economic onshoring because it's faster.”
Listen at 20:07
CPKC connects Canada, the United States, and Mexico through one network.
“Companies like CPKC, Canadian Pacific, Kansas City owns the only network. connects all North American countries, Canada, U.S. and Mexico.”
Listen at 20:16
Old Dominion Freight Line is by far the most efficient U.S. less-than-truckload company.
“they are the most efficient less than truckload company in the US by far.”
Listen at 21:08
Old Dominion has 35% excess capacity.
“they have 35% excess capacity”
Listen at 22:07
Old Dominion gains market share when competitors face excess demand.
“And that's where Altominion starts to gain market share.”
Listen at 22:34
Leo has become very bullish on housing.
“I turned very bullish on.”
Listen at 24:21
Inflation and interest rates will remain higher for longer.
“in 2020 we said we expect inflation to be higher for longer and interest rates as well and that's still the case”
Listen at 25:11
Inflation and interest rates will remain higher for longer.
“we expect inflation to be higher for longer and interest rates as well and that's still the case”
Listen at 25:12
Most investors should use ETFs because they provide automatic diversification.
“most of the time I tell people outside of Seeking Alpha, stick to ETFs for many reasons. One of them is you're automatically diversified.”
Listen at 26:34
AI-related stocks comprise roughly 60% of the S&P 500.
“AI-related stocks account for roughly 60% of the S&P 500.”
Listen at 27:25
Investors should diversify beyond the S&P 500.
“diversify beyond S&P 500.”
Listen at 28:00
The S&P 500 provides less diversification than it historically did.
“the S&P 500 isn't that great of a diversification tool that it used to be”
Listen at 28:33
Investors should remain calm and minimize trading during political volatility.
“people need to just calm down, avoid trading as much as possible.”
Listen at 29:45
Most investors would be better off leaving their portfolios unchanged for a decade.
“most people, even stock pickers, will be better off if they just don't do anything with their portfolio for the next decade.”
Listen at 29:58
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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