In this article, we are going to discuss the 10 best-performing utility stocks in 2025.
The S&P Utilities index surged by 12.7% in 2025, lagging behind the 16.4% gains posted by the overall S&P 500 during the year. With hundreds of billions of dollars pouring into power-hungry data centers, the utilities sector has emerged as one of the biggest winners of the ongoing AI boom.
Multiple hyperscalers signed long-term power purchase agreements (PPAs) with utility companies last year to make sure that they had enough energy available to keep up in the AI race. As a result, utility stocks managed to outperform the market for most of 2025. However, the sector witnessed a pullback in the last quarter following the fears of a potential AI bubble, with investors concerned if the promised billions worth of investments would actually come to fruition or not.
That said, the sector still has strong growth potential. According to the Energy Information Administration, US electricity demand, which reached its second straight record high in 2025, is set to maintain this momentum and beat those records in 2026 and 2027 as well. The unprecedented consumption is driven in part by data centers and cryptocurrency, as well as the rapid electrification of homes and businesses.
With that said, here are the Best Performing Utility Stocks in 2025.
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Our Methodology
To collect data for this article, we used historical data on Yahoo Finance to identify utility stocks that posted the highest gains between the close of December 31, 2024, and the close of December 31, 2025. To keep our list relevant, we have only included companies with a market cap of at least $2 billion. Finally, we ranked the stocks by 2025 gains and listed the number of hedge fund investors for each stock at the end of Q3 2025, per the Insider Monkey database. The following are the Best Performing Utility Stocks in 2025.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Entergy Corporation (NYSE:ETR)
Share Price Gains in 2025: 21.91%
Number of Hedge Fund Holders: 56
Entergy Corporation (NYSE:ETR) is an integrated energy company that provides electricity to 3 million utility customers in Arkansas, Louisiana, Mississippi, and Texas.
Entergy Corporation (NYSE:ETR) received a boost on January 9 when TD Cowen analyst Shelby Tucker initiated coverage of the stock with a ‘Buy’ rating and a price target of $108, indicating an upside of 12% from the current levels. The firm expects ETR’s EPS to grow by 10.5% through the end of the decade, driven by the increasing load from industrial and data center clients. Moreover, the analyst added that support from the state regulatory bodies is ‘key to our theme’.
Earlier on January 6, Argus also raised its price target on Entergy Corporation (NYSE:ETR) from $94 to $100, while maintaining a ‘Buy’ rating on the shares. Industrial sales were the largest growth contributors for Entergy in Q3 2025, and the analyst expects this strong industrial growth to continue through the end of the decade in the states of Louisiana, Mississippi, Arkansas, and Texas.
With an impressive annual dividend yield of 2.71%, Entergy Corporation (NYSE:ETR) was recently included in our list of the 11 Energy Stocks to Buy for a Retirement Stock Portfolio.
9. American Electric Power Company, Inc. (NASDAQ:AEP)
Share Price Gains in 2025: 25.02%
Number of Hedge Fund Holders: 56
American Electric Power Company, Inc. (NASDAQ:AEP) is one of the largest electric utilities in the United States, powering millions of homes and businesses each day.
On January 12, BofA analyst Ross Fowler downgraded American Electric Power Company, Inc. (NASDAQ:AEP) from ‘Buy’ to ‘Neutral, while also trimming its price target from $131 to $122. The downgrade is primarily driven by valuation concerns, as AEP surged by 25% in 2025, compared to gains of around 12.7% from the overall S&P Utility index. The analyst highlighted that AEP is trading at a 4% premium compared to its peers, limiting its upside potential. Moreover, while BofA believes that the utility has a strong growth outlook, especially in Texas, it expects regulatory relationships to take time to develop and sees ‘limited near-term prospects’.
That said, American Electric Power Company, Inc. (NASDAQ:AEP) continues its focus on growth and announced on January 8 that it would acquire solid oxide fuel cells from Bloom Energy. The $2.65 billion deal is part of the utility’s plans to develop and build a fuel cell power generation facility in Wyoming. Moreover, AEP also disclosed that it had already signed a 20-year offtake agreement with an unnamed customer for 100% of the output from the planned facility.
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