12 Best Electric Utility Stocks to Buy for the Data Center Power Surge

Why It Matters

The data‑center power boom creates a durable earnings tail for utilities, offering investors a high‑yield, growth‑oriented asset class as AI infrastructure expands.

Key Takeaways

• US utilities forecast $1.3 trillion capex 2026‑2030
• Data centers drove half of last year’s electricity demand growth
• Dominion Energy raised price target to $70, signaling 13% upside
• WEC Energy posted $2.45 EPS, beating estimates by $0.18
• Hedge fund holdings used to rank top 12 utility stocks

Pulse Analysis

The rapid expansion of AI workloads is reshaping the U.S. power landscape, with data centers now accounting for about 50% of the year‑over‑year electricity demand increase. This shift is not a temporary blip; analysts expect demand to keep climbing as hyperscalers pour hundreds of billions into AI‑focused infrastructure. Utilities, traditionally seen as defensive, are becoming growth engines, driven by the need for reliable, high‑capacity power delivery to these energy‑intensive facilities.

Capital spending is the clearest indicator of this transformation. Regulatory Research Associates estimates a $1.3 trillion aggregate capex outlay for U.S. utilities from 2026 to 2030, aimed at grid modernization, resilience upgrades, and new generation projects. Such investment levels dwarf typical utility spending cycles, signaling that the sector is positioning itself for a new era of demand‑side dynamics. Companies that can secure long‑term contracts with data‑center operators stand to capture premium rates and higher return on equity.

Investors are taking note, as evidenced by the hedge‑fund‑centric stock screen that underpins the article’s list. Dominion Energy’s recent price‑target hike to $70 reflects confidence in its Virginia data‑center hub, while WEC Energy’s earnings beat underscores the broader trend of utility profitability tied to commercial and industrial consumption. By aligning with hedge‑fund sentiment, the highlighted utilities offer a blend of stable dividends and upside potential, making them attractive candidates for portfolios seeking exposure to the AI‑driven power surge.