In this article, we are going to discuss the 10 best electrical infrastructure stocks to buy according to hedge funds.
The American utilities sector has had its strongest start to the year since 2019, benefiting from an investor retreat from riskier assets during the Middle East conflict and the strong electricity demand from firms building out AI infrastructure. The S&P Utilities index has surged by 8.43% since the beginning of 2026, compared to the 5.11% gains delivered by the overall S&P 500 during the period. This outperformance stems from the sector’s traditional defensive role, offering investors an opportunity for steady dividend payouts and lower volatility during market swings.
The US electricity demand surged to a record high last year, with data centers accounting for around 50% of the demand growth. As the global AI race continues its momentum, the country’s power demand remains on track to surge even further in 2026 and 2027. This positions the utilities sector well to continue delivering strong growth and also sustain its high shareholder returns in the future.
With that said, here are the Best Electricity Infrastructure Stocks to Buy in 2026.
Our Methodology
To collect data for this article, we used our stock screeners to identify electrical infrastructure stocks with the highest number of hedge fund holders at the end of Q4 2025, as per the Insider Monkey database. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. The following are the Best Electrical Infrastructure Stocks to Buy Now.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. FirstEnergy Corp. (NYSE:FE)
Number of Hedge Fund Holders: 41
FirstEnergy Corp. (NYSE:FE)’s electric distribution companies form one of the nation’s largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland, and New York. The company’s transmission subsidiaries operate approximately 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions.
FirstEnergy Corp. (NYSE:FE) reported its Q1 2026 results on April 28, with the company growing its core earnings by 7.5% YoY to $0.72 per share, in line with market expectations. Revenue for the quarter also grew by 11.6% YoY to $4.2 billion, beating estimates by over $362 million. The utility posted a profit of $405 million, up 12.5% compared to the same period last year, due to the higher electricity rates and growing demand from power-hungry data centers.
FirstEnergy Corp. (NYSE:FE) reaffirmed its core earnings guidance range of $2.62 to $2.82 per share for FY 2026, helped by its $6 billion capital investment plan for the year, focusing on grid modernization, distribution upgrades, and transmission reliability. Moreover, the company revealed that its broader CapEx plan of $36 billion for 2026 to 2030 is expected to generate about 10% compounded annual rate‑base growth.
9. Exelon Corporation (NASDAQ:EXC)
Number of Hedge Fund Holders: 45
Exelon Corporation (NASDAQ:EXC) is one of the country’s largest utility companies, serving more than 10 million customers through six fully regulated transmission and distribution utilities.
On April 28, Exelon Corporation (NASDAQ:EXC) declared a quarterly dividend of $0.42 per share. The dividend is payable on June 15 to shareholders as of the June 4 record. EXC currently offers a robust annual dividend yield of 3.57%, putting it among the 15 Utility Stocks with Highest Dividends.
Exelon Corporation (NASDAQ:EXC) has delivered a 7.4% annual earnings growth rate and 8% rate base growth since 2021, highlighting its ability to navigate changes and consistently execute. The company is now targeting operating earnings of $2.81 to $2.91 per share for FY 2026. Moreover, the utility is guiding an annualized earnings growth of 5% to 7% through 2029, with the expectation of being near the top end of that range.
Heartland Advisors, an investment management company, stated the following regarding Exelon Corporation (NASDAQ:EXC) in its Q1 2026 investor letter:
“Utilities. Exelon Corporation (NASDAQ:EXC), a transmission and distribution focused utility operating across multiple U.S. regions, represents a Deep Value utility holding that inflected positively versus peers during the quarter.
Exelon, which operates in Delaware, Illinois, Maryland, New Jersey, Pennsylvania, and Washington, D.C., doesn’t generate power. It owns and manages the transmission lines, local wires, and control systems that distribute that electricity. Thanks to its geography, it must work with PJM Interconnection, a regional transmission organization that runs wholesale markets and directs the flow of power for a large part of the Eastern United States. In our opinion, PJM is a flawed market where consumers are being squeezed with high prices. However, we believe that part of the solution represents a growing opportunity set for EXC in the form of higher transmission investment and eventually more state-regulated generation growth.
The company’s updated 5-year outlook provided the clearest evidence yet of this prospect becoming reality. Despite recent share price appreciation, the stock continues to trade at a discount to peers of comparable quality, and we consider the re-rating opportunity versus peers to be in the early stages.”
8. Edison International (NYSE:EIX)
Number of Hedge Fund Holders: 47
Edison International (NYSE:EIX) is one of the largest electric utility holding companies in America, focused on providing clean and reliable energy and energy services through its independent companies.
On April 29, Barclays slightly lowered its price target on Edison International (NYSE:EIX) from $78 to $77, but kept an ‘Overweight’ rating on the shares. The trimmed target, which still represents an upside of 10% from the current levels, comes after the utility beat earnings estimates in Q1 and reaffirmed all aspects of its financial plan.
Edison International (NYSE:EIX) reported its Q1 2026 results on April 28, with the company’s adjusted EPS of $1.42 exceeding expectations by $0.09. Core earnings increased by $0.05, primarily due to the adoption of the GRC decision last year. However, the utility’s revenue of $4.1 billion fell short of estimates by just over $23 million, despite a 7.6% YoY growth.
Edison International (NYSE:EIX) reaffirmed its 2026 core EPS guidance of $5.90-$6.20, in addition to expressing confidence in hitting its target of 5-7% core EPS growth from 2025-2030.
7. Entergy Corporation (NYSE:ETR)
Number of Hedge Fund Holders: 50
Entergy Corporation (NYSE:ETR) delivers electricity and gas services to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.
Entergy Corporation (NYSE:ETR) reported its Q1 2026 results on February 29, with the company’s adjusted EPS of $0.86 slightly above estimates by $0.02, driven by customer investments, regulatory actions, and offset by higher depreciation, taxes other than income taxes, and interest expense from capital expenditures. The utility’s Industrial sales growth was very strong at 15%, while overall retail sales grew by 6%.
Entergy Corporation (NYSE:ETR) reaffirmed its 2026 adjusted EPS guidance range of $4.25 to $4.45. Moreover, the company increased its long-term adjusted EPS outlooks, raising its 2027 outlook by $0.20 and its 2029 outlook by $0.50 to $6.40 per share. This is driven by an expected 8.5% compound annual retail sales growth through 2029, including a compound annual industrial growth of 16%.
Entergy Corporation (NYSE:ETR) also bumped up its four-year capital plan by $14 billion to $57 billion, primarily due to a new Electric Service Agreement that the company signed with Meta for another data center in North Louisiana. The investment includes seven new combined cycle units, transmission infrastructure, and battery storage facilities.
6. American Electric Power Company, Inc. (NASDAQ:AEP)
Number of Hedge Fund Holders: 60
American Electric Power Company, Inc. (NASDAQ:AEP) is one of the nation’s largest electricity producers with approximately 29,000 megawatts of diverse generating capacity. The company operates and maintains the nation’s largest electric transmission system with 40,000 line miles, along with more than 225,000 miles of distribution lines to deliver energy to 5.6 million customers in 11 states.
On April 28, American Electric Power Company, Inc. (NASDAQ:AEP) declared a quarterly dividend of $0.95 per share. The dividend is payable on June 10 to shareholders as of the May 8 record. As of the writing of this piece, AEP boasts an annual dividend yield of 2.77%, putting it among the 10 Best Large Cap Dividend Growth Stocks to Invest in.
American Electric Power Company, Inc. (NASDAQ:AEP) is targeting operating earnings in the range of $6.15 to $6.45 per share for FY 2026, indicating a YoY growth of 5.5% at the midpoint. Moreover, the company has guided a long-term earnings growth rate of 7% to 9% for 2026 to 2030, with an expected CAGR of 9%. In its last earnings call, the utility also doubled its contracted load outlook to 56 GW by 2030.
While we acknowledge the potential of AEP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AEP and that has 100x upside potential, check out our report about the cheapest AI stock.
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