{"id":406143,"date":"2026-02-03T19:42:14","date_gmt":"2026-02-03T19:42:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/406143\/"},"modified":"2026-02-03T19:42:14","modified_gmt":"2026-02-03T19:42:14","slug":"rolls-royce-stock-is-quietly-turning-into-an-ai-play","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/406143\/","title":{"rendered":"Rolls-Royce stock is quietly turning into an AI play"},"content":{"rendered":"

\"Two<\/p>\n

Image source: Getty Images<\/p>\n

Over the course of Rolls-Royce (LSE: RR.<\/a>) stock surging 1,595% in the last few years, much has been made of two of its three divisions. Civil Aerospace, which makes engines for civilian aeroplanes, has been thriving in part thanks to the rebound of passenger flights since the pandemic. Defence, which includes engines for military aircraft and reactors for submarines, has been boosted by huge increases to government defence spending.<\/p>\n

But there\u2019s a third division that gets less attention than those two. And it\u2019s a segment that has been signing contracts with Nvidia and playing a vital role in the artificial intelligence revolution. It also means Rolls-Royce could end up being the FTSE 100\u2018s AI superstar.<\/p>\n

Data centres<\/p>\n

The third division is called Power Systems and encompasses a number of types of power generation like generators or engines. Why is it playing a part in artificial intelligence? Well, it all comes down to data centres.<\/p>\n

The data centres used to train artificial intelligence can\u2019t just be switched on or off. Each one contains thousands of GPUs working on some of the most complex projects known to humanity. The power goes out? A disaster. That\u2019s not tenable for pioneering AI giants like Nvidia. Hence, reliable power is very, very important.<\/p>\n

Enter Rolls-Royce. Using its critical systems like mtu Series 4000 gas gensets (a type of gas engine) or Series 4000 diesel generators, the company can provide data centres with crucial backup power generation.<\/p>\n

These systems can be put into action in a matter of seconds. They can even keep whole centres running for days in an emergency.<\/p>\n

The knock-on effect is that Power Systems is the firm\u2019s fastest-growing division. Earnings rose 89% year on year for the first half<\/a> of 2025. With studies predicting power generation from data centres to climb twofold by 2030, this might be one of the best \u2018pick and shovel\u2019 plays for artificial intelligence.<\/p>\n

Throw in the mooted deployment of Rolls-Royce SMRs (mini nuclear power stations) in these data centres. That could be another big revenue stream<\/a> when they come on-line in the 2030s.<\/p>\n

Worth it?<\/p>\n

That\u2019s a lot of bullish talk. So what\u2019s the bear case here? For one, naysayers might be right about artificial intelligence being in a bubble. What if the ChatGPTs of the world never lead to serious increases in productivity? What if the technology is as good as it ever gets? As an \u2018AI play\u2019 Rolls-Royce could suffer too.<\/p>\n

From another angle, Power Systems isn\u2019t the core of the business. It\u2019s still smaller in sales than both Civil Aerospace and Defence. Artificial intelligence only has so much impact on what\u2019s now a \u00a3101bn market cap company.<\/p>\n

Lastly, Rolls-Royce is looking very pricey on valuation terms. A forward price-to-earnings ratio of 40 is higher than many of the exciting pure AI plays. Heck, it\u2019s higher than Nvidia! Investors are paying a lot for each pound of profit.<\/p>\n

With all that being said, I think artificial intelligence is another feather in an already very impressive Rolls-Royce cap. I think the stock is worth considering. <\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images Over the course of Rolls-Royce (LSE: RR.) stock surging 1,595% in the last few…\n","protected":false},"author":2,"featured_media":406144,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":{"0":"post-406143","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-technology","12":"tag-uk","13":"tag-united-kingdom","14":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/406143","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=406143"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/406143\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/406144"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=406143"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=406143"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=406143"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}