In this article, we discuss 12 high-growth utility stocks to buy now.
According to an October 17 CNBC report, electricity firms in the United States are in a dilemma over how AI demand will shape the industry and how much capacity will actually be required to meet it. The dilemma is partly fuelled by the stock market, which anticipates significant investments in building massive data center infrastructure. Artificial intelligence companies are developing plans to make server infrastructures and facilities that could require as much electricity as entire cities. Consequently, the tech sector is investing in massive projects across several utilities to secure as many power sources as possible.
This data center boom is presenting challenges for utilities in determining the extent of power generation capacity they will need to maintain the integrity of the electric grid. On the downside, household electricity prices are rising as power demand outstrips supply, affecting consumers.
To address these pressures, many utility companies are preparing for significant infrastructure upgrades. According to an S&P Global report published in late September, investor-owned energy and water utility companies in the U.S. are expected to spend substantially over the next several years to meet the growing demand by building incremental capacity in gas, nuclear, renewable, and other power generation sources. In addition, they will be investing in upgrading the resilience of their infrastructure. Advanced technology, including advanced metering, cybersecurity systems, battery storage, and electrified mobility, will also be a key part of their investments.
Such large-scale spending is not only a response to immediate power challenges but also a driver of financial growth within the sector. According to the S&P Global report, capital expenditure is expected to lead to higher rate case proposals and cement larger profits for companies in the utility space. Total energy utility investments are forecasted to stand at $227.80 billion, $233.30 billion, and $214.84 billion in 2026, 2027, and 2028, respectively.
With this outlook in mind, let’s take a look at the high-growth utility stocks to buy now.
Our Methodology
For this list, we picked utility companies that have shown steady, relatively stronger growth than peers over the last few years. To narrow the shortlist, we included only firms with a 5-year average revenue growth rate of at least 5% and positive revenue growth projections for the next financial year. We also set a minimum market cap of $2 billion to focus on larger, more established companies. Moreover, we have presented the hedge fund sentiment for the stocks as of Q2 2025, ranking them in ascending order by the number of hedge fund holders.
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).
12. Chesapeake Utilities Corporation (NYSE:CPK)
Number of Hedge Fund Holders: 16
Average 5-Year Revenue Growth: 10.97%
Chesapeake Utilities Corporation (NYSE:CPK) is one of the best high-growth utility stocks to buy. On October 22, investment bank BTIG started coverage of CPK with a Neutral rating, noting the company’s “best-in-class growth” prospects. The firm noted that Chesapeake delivered revenue growth of nearly 19% over the past year, but this achievement is already priced into the current stock valuation. This reflects modest upside.
BTIG commented on the company’s broadly structured and diversified operations over the past few years, which have cemented its standing in high-growth markets while optimizing the current portfolio.
The investment firm also observed that Chesapeake’s growth potential is in the upper single digits until at least 2028, which adds to its strong market positioning compared to industry peers.
Additionally, the firm said it would require more information about potential gas transmission projects before upping its stance on the stock, but noted that CPK is a “premium utility story” that justifies the valuation multiple it is trading at currently.
Chesapeake Utilities Corporation (NYSE:CPK) was established in 1859 and is based in Dover, Delaware. It is a natural gas distribution company that has two segments: Regulated Energy and Unregulated Energy.
11. Spire Inc. (NYSE:SR)
Number of Hedge Fund Holders: 18
Average 5-Year Revenue Growth: 6.41%
Spire Inc. (NYSE:SR) is one of the best high-growth utility stocks to buy. On October 13, UBS assigned a Buy rating to Spire and lifted the price target from $80 to $95.
The investment firm mentioned that Spire is expected to continue operations under an uplifting regulatory environment in Missouri, and the recent asset purchases in Tennessee will help it de-risk its portfolio and support future growth.
UBS expects the company’s Q4 earnings to offer tangible updates, such as the EPS guidance for 2026-27. According to the firm, the Q4 guidance could exceed its current 5%-7% outlook, although the need to keep its offerings reasonably priced may limit further growth-rate surges.
UBS anticipates that Spire will be fully under forward test years in Missouri by 2028. When that happens, earnings and rate base growth are expected to adopt a steady trend.
The firm observed that Spire presently trades at a 2x discount to its competitors, given its updated 2027 EPS estimate of $5.65. According to UBS, the earnings power is factored in at over 10% less than its forecast, while the product portfolio is strengthening and becoming more stable, leading to solid earnings.
Separately, Spire has shown solid execution over time, as evidenced by its robust 55-year history of dividend payouts.
Spire Inc. (NYSE:SR), headquartered in St. Louis, Missouri, operates in the natural gas sector through three business divisions: Gas Utility, Gas Marketing, and Midstream.
10. Atmos Energy Corporation (NYSE:ATO)
Number of Hedge Fund Holders: 31
Average 5-Year Revenue Growth: 9.58%
Atmos Energy Corporation (NYSE:ATO) is one of the best high-growth utility stocks to buy. On October 16, BofA analysts downgraded Atmos to Neutral from Buy, noting that the stock has a high valuation multiple compared to others in the industry. However, the firm updated the price target from $182 to $185.
BofA observed that in comparison to industry peers, ATO is presently trading at a 22% valuation premium. The investment firm commented that the company’s growth potential is already factored into the high valuation multiple.
Although there is a possibility of higher capex requirements to advance data centers in Texas, the firm believes these opportunities will not boost short-term earnings potential much beyond what the market already anticipates.
Moreover, BofA adjusted its EPS forecast for Atmos to $7.41, $7.95, and $8.60 for FY 2025, 2026, and 2027, respectively, which are marginally higher than the prior numbers of $7.30, $7.83, and $8.52 for these years.
The updated numbers indicated an EPS CAGR of nearly 8.4%, which is higher than the company’s guidance of 6% to 8%. It factors in the effect of the Texas House Bill 4384 as well.
Atmos Energy Corporation (NYSE:ATO) is a Texas-based company that operates within the natural gas sector through two business segments: Distribution and Pipeline and Storage. The company serves residential, commercial, public, and industrial customers.
9. OGE Energy Corp. (NYSE:OGE)
Number of Hedge Fund Holders: 32
Average 5-Year Revenue Growth: 9.76%
OGE Energy Corp. (NYSE:OGE) is one of the best high-growth utility stocks to buy. It is an Oklahoma-based electric company that specializes in energy generation, transmission, and distribution. OGE uses coal, natural gas, wind, and solar to generate electricity.
On October 22, Jefferies maintained a Buy rating on OGE while lifting the price target from $52 to $55. The investment firm anticipates a largely optimistic “super cycle” of third-quarter developments. The utilities space is also expected to increase capital spending while the cost of capital declines.
While Jefferies remained bullish with a Buy call, BofA also raised its price target on OGE Energy to $48 (from $46) but assigned a Neutral rating in a report published the next day. The firm stands by its view that the company’s solid execution trajectory and opportunities pertaining to higher power consumption trends support its premium multiple. The firm maintains that OGE’s $6.25 billion 5-year capital spending plan, as well as the construction of its grids and transmission lines, is an important priority for investors.
8. Clearway Energy, Inc. (NYSE:CWEN)
Number of Hedge Fund Holders: 33
Average 5-Year Revenue Growth: 5.72%
Clearway Energy, Inc. (NYSE:CWEN) is one of the best high-growth utility stocks to buy. On October 6, the company agreed to a binding contract to acquire a functional solar portfolio of 613 MWac from Deriva Energy.
The solar portfolio is spread across eight states, with its major assets located in the CAISO and PJM markets. Since 227 MWac of the solar portfolio, comprising 12 assets, is located in the Western states, the company will form a 50/50 joint venture with a current investment partner, namely Fengate Asset Management.
This transaction is anticipated to conclude by the second quarter next year and will need a capital funding of nearly $210 million to $230 million, after adjustments for estimated closing items and financing at the asset level.
The company expects the purchase to immediately lead its 5-year annual CAFD yield to more than 12%, offering an incremental 5-year average annual cash available for distribution (CAFD) of nearly $27 million starting January 1, 2027.
The solar portfolio has an average contract duration of 10 years, which matches Clearway Energy, Inc. (NYSE:CWEN)’s present assets. The company also mentioned that it will finance the acquisition using the existing capital framework provided, and it does not expect additional equity issuances apart from those already in the pipeline.
Clearway Energy, Inc. (NYSE:CWEN) is a renewable energy company with a portfolio of wind, solar, and battery energy storage systems, along with combustion-based power plants that promote grid reliability.
7. Ameren Corporation (NYSE:AEE)
Number of Hedge Fund Holders: 36
Average 5-Year Revenue Growth: 6.48%
Ameren Corporation (NYSE:AEE) is one of the best high-growth utility stocks to buy. The company was established in 1881 and has its headquarters in Saint Louis, Missouri. Ameren offers electricity and natural gas services through its subsidiaries in Missouri and Illinois. It generates energy from coal, nuclear, natural gas, and renewable sources such as wind, hydro, methane gas, and solar.
On October 20, Jefferies reiterated a Buy recommendation on Ameren while lifting the price target from $121 to $125. The higher price target comes from the firm’s expectation that AEE’s EPS will fall at the upper end of its EPS compound annual growth rate (CAGR) guidance of 6% to 8%.
Jefferies observed many factors influencing Ameren’s growth, such as new rates in Missouri, return on equity (ROE) dynamics, grid infrastructure spending, Physical Resilience Plan (PRP) capital allocation mix, and rising power demand.
The firm forecasts Ameren’s EPS to increase by a CAGR of nearly 8.2%, topping the market expectation of 7.5%, and mentioned that AEE has already achieved the top half of its FY2025 guidance.
Moreover, Jefferies added that Ameren is trading at a slight premium of 6.2% to its FY 2027 EPS projections, which indicates value compared to local competitors. The investment firm also anticipates good Q3 updates, while noting that a thorough financial report is not expected until Q4.
6. Eversource Energy (NYSE:ES)
Number of Hedge Fund Holders: 40
Average 5-Year Revenue Growth: 7.91%
Eversource Energy (NYSE:ES) is one of the best high-growth utility stocks to buy. On October 15, Eversource reported that its future liability for payments to Global Infrastructure Partners rose by $285 million. This was in reference to its disposal of its two renewable energy projects, namely South Fork Wind and Revolution Wind.
The company mentioned that any tax advantages from the loss on these project sales will partly balance the higher liability, leading to a net non-recurring after-tax charge amounting to nearly $75 million.
Furthermore, Eversource Energy (NYSE:ES) slashed its non-GAAP EPS guidance for 2025 to range from $4.72 to $4.80, compared to its prior guidance between $4.67 and $4.82.
Following this development, investment firm Mizuho had reiterated an Outperform rating and a price target of $72 on October 15, noting that the renewed liability is small and does not significantly alter the company’s financing requirements. Interestingly, on October 27, Mizuho raised its price target to $81 and again reiterated its bullish stance with a Buy rating. The firm based its action on the company’s better financial strength and the improving regulatory environment, as evidenced by the appointment of new commissioners in Connecticut. Moreover, it said that it now has “greater clarity” on the Revolution Wind project and the disposal of the Aquarion water utility business.
Eversource is a Massachusetts-based utility company that provides electricity, natural gas, and water services across Connecticut, Massachusetts, and New Hampshire. Its operations include electric transmission and distribution, solar power generation, and regulated water utilities.
5. American Electric Power Company, Inc. (NASDAQ:AEP)
Number of Hedge Fund Holders: 53
Average 5-Year Revenue Growth: 5.54%
American Electric Power Company, Inc. (NASDAQ:AEP) is one of the best high-growth utility stocks to buy. On October 16, BMO Capital reiterated an Outperform rating on AEP and lifted the price target from $121 to $127. The updated price target was announced in light of the company’s upcoming Q3 2025 financial results, scheduled for release on October 29.
The investment firm expects Q3 EPS to come in at $1.78, which is less than the median estimates of $1.83 and $1.86 at FactSet and Bloomberg, respectively.
BMO mentioned that American Electric will revise its 5-year financial agenda ahead of the Edison Electric Institute (EEI) conference. The company previously discussed this amendment during the Q2 earnings call, adding that it expected a capital program of $70 billion or higher, suggesting a 30% increase from the existing plan.
BMO noted multiple primary determinants that will shape the potential stock rerating, including the asset portfolio, funding strategy, and the net effect on AEP’s prior long-term EPS CAGR, which ranges from 6% to 8%.
The investment firm anticipates that American Electric will use equity financing for nearly 30%-40% of its additional capex.
American Electric, headquartered in Columbus, Ohio, is a public utility holding company specializing in electricity generation, transmission, and distribution for retail and wholesale customers.
4. NextEra Energy, Inc. (NYSE:NEE)
Number of Hedge Fund Holders: 66
Average 5-Year Revenue Growth: 7.64%
NextEra Energy, Inc. (NYSE:NEE) is one of the best high-growth utility stocks to buy. It is an energy company in North America that generates, transmits, and distributes electricity, with a portfolio comprising wind, solar, nuclear, natural gas, and other clean energy sources.
On October 22, BTIG initiated coverage of NextEra with a Buy recommendation and a price target of $98. The firm noted that NEE is a top utility provider offering a “premier generation development platform,” positioning it as one of the best-run companies within the sector, as well as one of the most prominent unregulated power generation entities in the country.
The firm also observed that NextEra should still gain an advantage from higher-than-average utility strength in a proper regulatory landscape under a potential settlement that factors in slight customer rate impacts.
BTIG stressed that NextEra Energy, Inc. (NYSE:NEE)’s development platform demonstrates one of the select few large-scale solutions to problems within the sector regarding supply sufficiency during high customer demand.
3. NRG Energy, Inc. (NYSE:NRG)
Number of Hedge Fund Holders: 73
Average 5-Year Revenue Growth: 32.31%
NRG Energy, Inc. (NYSE:NRG) is one of the best high-growth utility stocks to buy. On October 20, Jefferies reiterated a Buy recommendation on NRG and increased the price target from $176 to $198. The higher price target factors in potentially larger power and PJM capacity, as well as reduced taxes and cost of financing.
Jefferies remained confident that NRG’s groundbreaking purchase of LS Power portfolio will be approved, and the firm expects an average 2028-2029 EBITDA of $1.9 billion from this acquisition, which brings in a gas generation capacity of 13 gigawatts as well as a demand-side management platform. The investment firm also added that NRG’s Q3 update will shed light on financial results excluding the acquisition.
According to Jefferies, NRG Energy, Inc. (NYSE:NRG) stock offers a potential buying opportunity, as it has a 13% free cash flow yield, which is higher than its industry peers’ mid-single-digit yields. There is also possible upside from data centers, which has not been factored into the stock price.
NRG is a Texas-based integrated energy and home services company operating across the United States and Canada, generating electricity from natural gas, coal, oil, solar, and battery storage.
2. PG&E Corporation (NYSE:PCG)
Number of Hedge Fund Holders: 77
Average 5-Year Revenue Growth: 7.53%
PG&E Corporation (NYSE:PCG) is one of the best high-growth utility stocks to buy. On October 23, PCG reported financial results for Q3 2025, with earnings per share of $0.50 topping Wall Street estimates of $0.43 and revenue of $6.25 falling short of forecasts of $6.41 billion.
Consequently, PCG has lowered its EPS guidance for 2025 to $1.49-$1.51 per share, which still reflects 10% year-over-year growth. The 2026 guidance for EPS stood at $1.62-$1.66, indicating 9% growth.
A core part of PG&E’s Q3 presentation was its significant $73 billion 5-year capital agenda for 2026-2030, with plans to raise the company’s weighted-average rate base from $69 billion to $106 billion over 2025 to 2030. This demonstrates an estimated average yearly growth of 9%. There is a chance for an additional $5 billion in investment avenues that are advantageous for customers.
This capital agenda is divided across electric distribution, transmission, and customer benefits. The company mentioned that 93% of its 2026 capex has already been approved, offering clarity on short-term investments. The capital plan does not include $2.9 billion in SB 254 securitized capital.
PG&E Corporation (NYSE:PCG) provides electricity and natural gas across northern and central California, with a portfolio that includes nuclear, hydroelectric, fossil-fuel, fuel-cell, and solar generation.
1. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 111
Average 5-Year Revenue Growth: 9.36%
Vistra Corp. (NYSE:VST) is one of the best high-growth utility stocks to buy. On October 22, the company announced that it has concluded the purchase of seven advanced natural gas generation plants from Lotus Infrastructure Partners. This increases the power generation capacity at Vistra by roughly 2,600 megawatts.
This acquisition deal got all the necessary government authorizations, and it bolsters the company’s presence across major competitive end-markets such as PJM, New England, New York, and California, thus widening Vistra’s strategic presence and enhancing its customer service.
Vistra’s president and chief executive officer, Jim Burke, commented:
“This acquisition reflects Vistra’s disciplined, opportunistic approach to growth. We start with the needs of our customers — building on our operational capabilities — and then pursue acquisitions that are the right fit for Vistra, with a sharp focus on returns as well as scale.”
This growth plan seems to be working, with revenue skyrocketing by 31.6% in the last year. Moreover, Vistra mentioned that this acquisition would enhance its capacity to offer safe, affordable power to customers while contributing to a sustainable energy future.
Vistra Corp. (NYSE:VST) is a Texas-based integrated energy company engaged in the sale of electricity and natural gas supply, in addition to large-scale power generation in the United States.
While we acknowledge the potential of VST to grow, 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 VST and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.
