In this article, we are going to discuss the 12 best electric utility stocks to buy for the data center power surge.
The US electricity demand jumped 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 and the American hyperscalers pour hundreds of billions of dollars into building out their AI infrastructure, the country’s power demand is on track to reach even further highs in 2026 and 2027.
As a result, the US utilities sector witnessed its strongest start to the year since 2019, driven by an investor retreat from riskier assets during the Middle East conflict and the surging power demand from data centers. To keep up with the soaring demand, the country’s utilities are planning significant capital expenditures over the next five years, focused on infrastructure modernization, reliability, and new generation capacity.
According to Regulatory Research Associates, the US energy utilities are forecasted to spend approximately $1.3 trillion in aggregate capital expenditures between 2026 and 2030. The combination of a strong demand and rising investments positions the sector to continue delivering strong growth and also sustain its high shareholder returns in the future.
With that said, here are the Best Utility Stocks to Buy Amid the Data Center Power Surge.
Our Methodology
To collect data for this article, we used our stock screeners to identify utility companies catering to the soaring power demand from data centers in the United States. We ranked these stocks by the number of hedge funds invested in them 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 Utility 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).
12. Dominion Energy, Inc. (NYSE:D)
Number of Hedge Fund Holders: 40
Dominion Energy, Inc. (NYSE:D) provides regulated electricity service to 3.6 million homes and businesses in Virginia, North Carolina, and South Carolina, and regulated natural gas service to 500,000 customers in South Carolina.
On May 4, Barclays analyst Nicholas Campanella boosted the firm’s price target on Dominion Energy, Inc. (NYSE:D) from $66 to $70, while maintaining an ‘Overweight’ rating on the shares. The updated target, which represents an upside potential of over 13% from the current levels, comes following the utility’s “solid” Q1 report.
Dominion Energy, Inc. (NYSE:D) topped profit and revenue estimates in its first quarter, supported by the higher power demand in Virginia. The company caters to the largest cluster of data centers on the planet in Virginia, and it revealed that it had contracted nearly 51 GW of data center capacity as of March, up 2.5 GW from December 2025.
Dominion Energy, Inc. (NYSE:D) reaffirmed its operating earnings forecast of $3.45 to $3.69 per share for full-year 2026. Moreover, the company reiterated its target of an annual earnings growth at the midpoint of its 5% to 7% range, with a bias toward the upper half of the range starting from 2028.
11. WEC Energy Group, Inc. (NYSE:WEC)
Number of Hedge Fund Holders: 43
WEC Energy Group, Inc. (NYSE:WEC) provides regulated natural gas and electricity, and renewable and nonregulated renewable energy services in the United States.
WEC Energy Group, Inc. (NYSE:WEC) reported strong results for its Q1 2026 on May 5, helped by the higher power sales to residential and industrial customers. The company delivered a profit of $2.45 per share during the quarter, up $0.18 compared to the same period last year and exceeding estimates by $0.15. Its revenue also grew by 9% YoY to $3.43 billion and topped expectations by almost $17 million.
According to WEC, electricity consumption by the large commercial and industrial customers surged by 2.7% YoY during the quarter, while usage among small commercial and industrial customers increased by 0.7%. Meanwhile, residential electricity demand edged up 0.2% from the same period last year, lifting total retail electricity deliveries by 1.3% YoY, excluding sales to an iron ore mine.
For the second quarter, WEC Energy Group, Inc. (NYSE:WEC) is targeting an EPS in the range of $0.76 to $0.82 per share. The utility also reaffirmed its full-year 2026 earnings guidance of $5.51 to $5.61 per share, assuming normal weather for the rest of the year. Moreover, the company expects long-term EPS growth of 7% to 8% a year on a compound annual basis between 2026 and 2030.
10. Public Service Enterprise Group Incorporated (NYSE:PEG)
Number of Hedge Fund Holders: 49
Public Service Enterprise Group Incorporated (NYSE:PEG) is a predominantly regulated energy company that engages in the provision of electric and gas services.
Public Service Enterprise Group Incorporated (NYSE:PEG) topped estimates in its Q1 2026 report on May 5, supported by the extreme winter weather that drove demand across its electric and gas businesses. The company’s adjusted EPS of $1.55 beat expectations by $0.12, while its revenue also surged by 19.5% YoY to $3.85 billion and comfortably exceeded forecasts by $496 million.
Public Service Enterprise Group Incorporated (NYSE:PEG)’s electricity sales rose 4% YoY during the quarter, while gas volumes sold and transported also surged by 7% as the worst winter storm in 30 years in the New Jersey-based utility’s service area drove the company’s highest gas send-out since 2019.
Public Service Enterprise Group Incorporated (NYSE:PEG) reaffirmed its operating earnings guidance of $4.28 to $4.40 per share for FY 2026, up 7% YoY at the midpoint. The company is targeting a long-term adjusted earnings growth outlook of 6%-8% through the end of the decade, citing robust regulated investments and nuclear generation cash flows as key drivers. Moreover, it also outlined a 5-year regulated capital investment plan of $22.5 billion to $25.5 billion to keep up with the soaring demand.
9. 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.
On May 5, Citi bumped up its price target on Entergy Corporation (NYSE:ETR) from $116 to $121, while keeping a ‘Neutral’ rating on the shares. The revised target, which reflects an upside of 8% from the current share price, comes after the utility topped profit estimates in its Q1 2026 report on April 29.
Entergy Corporation (NYSE:ETR) also reaffirmed its adjusted earnings target of $4.25 to $4.45 per share for FY 2026. Moreover, the company increased its long-term adjusted EPS guidance, 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 an annual industrial growth of 16%. To keep up with the soaring demand, Entergy also raised its 4-year capital plan to $57 billion, up from the $43 billion it announced in the last quarter.
8. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 51
Duke Energy Corporation (NYSE:DUK) engages in the distribution of natural gas and energy-related services. The company owns and operates a diverse mix of regulated power plants – including hydro, coal, nuclear, natural gas, solar, and battery storage.
Duke Energy Corporation (NYSE:DUK) exceeded Wall Street estimates in its Q1 2026 report on May 5, driven by the recovery of rate-based infrastructure investments and favorable weather. The company’s adjusted profit of $1.93 beat expectations by $0.13, while its revenue grew by over 11% YoY to $9.18 billion and topped forecasts by $690 million.
Duke Energy Corporation (NYSE:DUK) signed an additional 2.7 GW of electric service agreements with data center customers during the first quarter, bringing its total executed agreements to approximately 7.6 GW. Moreover, the company revealed that it was in advanced discussions on an additional 15.4 GW of data centers.
Duke Energy Corporation (NYSE:DUK) announced that it remains on track to achieve its 2026 EPS guidance range of $6.55 to $6.80, in addition to reaffirming its target of 5% to 7% long-term EPS growth rate through 2030.
Duke Energy Corporation (NYSE:DUK) also declared a quarterly dividend of $1.065 per share on May 7. The stock currently boasts an impressive annual dividend yield of 3.40% and was recently included in our list of the 10 Best Nuclear Energy Stocks to Buy for Dividends.
7. The Southern Company (NYSE:SO)
Number of Hedge Fund Holders: 54
Next on our list of the Best Electric Utility Stocks is The Southern Company (NYSE:SO), one of the largest producers of electricity in the United States and the largest wholesale provider in the Southeast.
On May 1, Mizuho slightly raised its price target on The Southern Company (NYSE:SO) from $104 to $105, while maintaining an ‘Outperform’ rating on the shares. The target boost, which indicates an upside of over 13% from the current price level, comes following the utility’s better-than-expected Q1 results.
The Southern Company (NYSE:SO) beat profit and revenue estimates and delivered YoY growth across all its major businesses in its Q1 report on April 30, helped by an increase in power demand. The company reported an adjusted EPS of $1.32, up $0.09 from the same period last year and exceeding the Wall Street estimates by $0.11. The utility’s revenue of $8.4 billion was also up nearly 8% YoY and topped forecasts by $280 million.
The Southern Company (NYSE:SO) expects adjusted earnings of $1 per share for the second quarter.
6. Xcel Energy Inc. (NASDAQ:XEL)
Number of Hedge Fund Holders: 57
Xcel Energy Inc. (NASDAQ:XEL) is a major US electricity and natural gas company, with operations in 8 Western and Midwestern states.
On May 4, Evercore ISI raised its price target on Xcel Energy Inc. (NASDAQ:XEL) from $93 to $96, while maintaining an ‘Outperform’ rating on the shares. The target boost, which reflects an upside of over 19% from the current price levels, comes after the company reported its Q1 2026 results on April 30.
Xcel Energy Inc. (NASDAQ:XEL)’s adjusted earnings of $0.91 per share in the first quarter were in line with expectations, as the higher recovery of electric infrastructure investments and stronger sales helped offset warm weather and higher financing costs. However, the company’s revenue of $4 billion fell short of estimates by $90 million, despite a YoY growth of almost 3%.
Xcel Energy Inc. (NASDAQ:XEL) reaffirmed its EPS guidance range of $4.04 to $4.16 per share for full-year 2026. Moreover, the company remains confident to deliver 6% to 8+% long-term earnings growth and expects to deliver 9% EPS growth on average through 2030.
While we acknowledge the potential of XEL 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 XEL and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 Best Electric Utility Stocks to Buy for the Data Center Power Surge.
Disclosure: None. Follow Insider Monkey on Google News.
