The biggest technology companies in the U.S. continue to pour billions of dollars into their AI initiatives.

Bloomberg estimates the four largest hyperscalers now plan to spend as much as $725 billion on capital expenditures this year. And most of it is tied to AI data-center equipment.

Google parent Alphabet (GOOGL) and software giant Microsoft (MSFT) are each targeting around $190 billion. Amazon (AMZN) is holding nearly $200 billion. And Facebook owner Meta Platforms (META) is now guiding for $125 billion to $145 billion.

The spending narrative was clear, even if the stocks’ reactions to another quarter of earnings weren’t.

Meta sold off 8% after raising its capital spending outlook. Alphabet rallied 15% after strong results. Microsoft and Amazon remained flat while pushing ahead with massive AI infrastructure budgets.

While Wall Street debated the winners and losers on earnings night, the physical work of building all that infrastructure still has to get done. 

AI players need more infrastructure built. Moreover, the pieces going into that infrastructure will only get more expensive.

Microsoft expects higher chip and memory prices to add roughly $25 billion to its full-year capex.

Meta raised the midpoint of its capex outlook by about $10 billion. The Big Tech giant pointed mostly to higher component costs, especially memory pricing.

Nvidia (NVDA) chips have become the workhorses of AI. They also carry gross margins near 75%, compared with rival Advanced Micro Devices’ (AMD) roughly 52%.

So for every dollar hyperscalers spend on Nvidia chips, Nvidia pockets far more in profit than other chip suppliers. Investors have started calling this premium the so-called “Nvidia tax.”

That makes it harder for hyperscalers to keep up. But falling behind on AI infrastructure means falling behind on model training, cloud capacity, and revenue. So the spending continues.

No matter how expensive the chips get, every new data center still needs the same fundamentals: land, power, and the electrical infrastructure to run it all.

And that’s where Eaton (ETN) comes in.

Eaton is one of the biggest power-management companies in the world. It helps operators manage power coming from the grid to the advanced chips housed inside data centers.

The company offers tools like uninterruptible power supplies, battery storage, and even microgrids—which provide backup power that works off the grid. 

Investors have noticed that Eaton is at the center of the data-center construction boom, as its stock has almost tripled over the past five years.

Uniform Accounting shows why that jump makes sense. Eaton’s Uniform earnings surged from about $2.2 billion five years ago to nearly $5 billion last year.

And investors expect earnings to keep rising. We can see this through Valens’ Embedded Expectations Analysis (“EEA”) framework.

The EEA starts by looking at a company’s current stock price. From there, we can calculate what the market expects from the company’s future cash flows. We then compare that with our own cash-flow projections.

In short, it tells us how well a company has to perform in the future to be worth what the market is paying for it today.

Uniform earnings stood at $5 billion last year. But investors are still plenty bullish.

They believe the AI infrastructure boom will translate to much higher Uniform earnings, reaching $8 billion by 2030.