In this article, we will look at the 15 Best Power Generation Stocks To Buy For Data Center Demand.
Power generation stocks are getting a closer look because the AI buildout is turning electricity from a background utility cost into one of the market’s biggest constraints. Data centers need steady, around-the-clock power, and that has pushed investors toward nuclear-heavy generators, natural gas-fired utilities and IPPs, regulated utilities with large data center load growth, and merchant power producers exposed to tighter electricity markets. Capital Group frames the shift directly, saying “Power demand in the U.S. is set to surge over the next decade,” driven by “rapid expansion of AI data centers,” and that “Power providers are transforming into critical enablers of growth.” The data center story is no longer just about chips, servers, and cloud platforms. It is also about who can supply the electricity.
J.P. Morgan Asset Management says the “exponential surge in AI workloads” is driving higher consumption needs for “data centers and energy,” while the “critical issue of energy supply” has received less attention. The firm also points to “an extremely tight supply environment” and highlights energy producers with “scalable natural gas, nuclear, or renewable generation capacity” as demand for reliable power accelerates. BlackRock makes a similar point, saying power is “one of the most strained” inputs in the AI buildout and that the backdrop now requires “more precise stock selection” inside the theme.
Against this backdrop, power generation stocks tied to data center demand deserve a closer look. With that in mind, let’s take a look at the 15 Best Power Generation Stocks To Buy For Data Center Demand.
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Our Methodology
We used the Finviz screener to identify power generation stocks that benefit from data center demand and offer notable upside from analysts’ price targets. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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).
15. The Southern Company (NYSE:SO)
On May 1, 2026, Raymond James raised its price target on The Southern Company (NYSE:SO) to $104 from $103 and maintained an Outperform rating. The firm said Southern continues to execute well, supported by strong demand visibility, a large contracted load pipeline, and an $81B regulated capital expenditure plan expected to drive 9% rate base growth through 2030. Raymond James also pointed to improving financing clarity and potential upside as investment activity ramps.
Mizuho has also raised its price target on The Southern Company to $105 from $104 previously while maintaining an Outperform rating on the shares.
On April 30, 2026, The Southern Company reported Q1 adjusted EPS of $1.32, above the $1.21 consensus estimate, while revenue came in at $8.4B compared to $8.11B expected. CEO Chris Womack said the company continues investing in infrastructure to support regional growth while focusing on reliability and stable rates for customers. Southern sees FY26 adjusted EPS of $4.50-$4.60 versus $4.57 consensus.
The Southern Company, through its subsidiaries, provides electricity and energy-related services to retail and wholesale customers in the United States.
14. Entergy Corporation (NYSE:ETR)
On May 5, 2026, Entergy Corporation (NYSE:ETR) announced the launch of a registered underwritten offering of $2.17B in common stock, subsequently priced at $113.00. Wells Fargo Securities, Citigroup, Barclays, and Scotiabank are serving as joint book-running managers.
On April 30, 2026, Scotiabank raised its price target on Entergy Corporation to $129 from $114 and maintained an Outperform rating. The firm called Entergy a “standout” utility tied to data center demand and cited another earnings beat-and-raise quarter, adding that the stock remains one of its top regulated utility picks.
UBS also raised its price target on Entergy Corporation to $135 from $131 and kept a Buy rating. The firm pointed to increased capital investment plans and higher 2029 EPS guidance tied to data center expansion opportunities, including Meta-related demand. UBS added that management’s commentary supported a favorable long-term growth outlook extending into 2030.
On April 29, 2026, Entergy Corporation reported Q1 adjusted EPS of 86c versus 84c consensus. CEO Drew Marsh said the company announced another hyperscale agreement in Louisiana that includes an estimated additional $2B of savings for retail customers under its Fair Share Plus pledge.
Entergy Corporation produces and distributes electricity across the United States.
13. Talen Energy Corporation (NASDAQ:TLN)
On May 5, 2026, Talen Energy Corporation (NASDAQ:TLN) reported Q1 EPS of $1.33 compared to ($2.94) last year, while revenue came in at $1.12B versus $1.07B consensus. CEO Mac McFarland said the company generated $473M in adjusted EBITDA and $350M in adjusted free cash flow during the quarter. He added that Talen continues to advance the Cornerstone acquisition after securing financing in April and repurchased 300,000 shares for $100M under its buyback program, with $1.9B remaining authorized through 2028. McFarland also said the company continues pursuing land development and contracting opportunities through its “flywheel strategy.” Talen Energy maintained its FY26 adjusted EBITDA outlook of $1.75B-$2.05B.
Ahead of the earnings report, Morgan Stanley raised its price target on Talen Energy Corporation to $498 from $479 previously and kept an Overweight rating on the shares.
Raymond James has also raised its price target on Talen Energy to $457 from $456 and maintained an Outperform rating on the shares. The firm said Q1 results across the independent power producer group were expected to be mixed, though Talen appeared well-positioned due to acquisitions, stronger PJM capacity revenues, and a heavily hedged portfolio.
Talen Energy Corporation is an independent power producer and infrastructure company that produces and sells electricity, capacity, and ancillary services into wholesale power markets in the United States.
12. Xcel Energy Inc. (NASDAQ:XEL)
On May 1, 2026, Mizuho analyst Anthony Crowdell raised the firm’s price target on Xcel Energy Inc. (NASDAQ:XEL) to $94 from $86 previously and maintained an Outperform rating on the shares.
On April 30, 2026, Xcel Energy Inc. reported Q1 ongoing EPS of 91c, in line with consensus, while revenue came in at $4.02B versus $4.11B expected. CEO Bob Frenzel said the company remains focused on strengthening and modernizing the grid, expanding energy sources, and deploying technologies aimed at maintaining safe, reliable, and affordable energy service. Xcel maintained its FY26 ongoing EPS outlook of $4.04-$4.16, compared to consensus estimates of $4.11.
Ahead of the earnings report, BMO Capital raised its price target on Xcel Energy Inc. to $94 from $90 and maintained an Outperform rating. The firm said investors were likely focused on the company’s regulatory calendar, including the Minnesota Electric ALJ and Colorado electric case proceedings. BMO also noted that Xcel’s geographic footprint gives it exposure to some of the most renewables-rich regions in the United States.
Xcel Energy Inc., through its subsidiaries, provides electric and natural gas delivery services in the United States.
11. Ameren Corporation (NYSE:AEE)
On May 5, 2026, Ameren Corporation (NYSE:AEE) reported Q1 EPS of $1.28, above the $1.18 consensus estimate, while revenue came in at $2.18B versus $2.25B expected. CEO Martin Lyons said rising energy demand continues to support the company’s infrastructure investment plans across its operating segments as Ameren works to maintain reliable and affordable service while preparing for future growth. Ameren maintained its FY26 diluted EPS outlook of $5.25-$5.45 compared to consensus estimates of $5.37.
On April 21, 2026, Wells Fargo analyst Shahriar Pourreza raised the firm’s price target on Ameren Corporation to $120 from $113 and maintained an Overweight rating. Following discussions with management teams across the regulated utility sector, Wells Fargo updated its Q1 estimates and increased its base valuation multiple to 17.5-times from 17-times.
Earlier, Truist analyst Richard Sunderland initiated coverage of Ameren Corporation with a Buy rating and a $126 price target as part of a broader launch of power and utility coverage. The firm said vertically integrated electric utilities stand to benefit from infrastructure investment tied to rising data center demand.
Ameren Corporation operates as a public utility holding company in the United States.
10. DTE Energy Company (NYSE:DTE)
On May 4, 2026, Barclays lowered its price target on DTE Energy Company (NYSE:DTE) to $154 from $156 and maintained an Equal Weight rating following the company’s Q1 report. The firm said a potential pause in the electric rate case could be positive, though not enough to materially change its investment thesis. Mizuho, meanwhile, raised its price target on DTE Energy Company to $165 from $155 previously and kept an Outperform rating on the shares.
On April 30, 2026, DTE Energy Company reported Q1 operating EPS of $1.95 versus $2.03 consensus. CEO Joi Harris said the company remains focused on improving reliability, modernizing infrastructure, and expanding clean energy resources while supporting economic growth in Michigan, including increased investment tied to data centers. DTE maintained its 2026 operating EPS outlook of $7.59-$7.73, compared to consensus estimates of $7.72.
Earlier in April, BofA raised its price target on DTE Energy Company to $162 from $155 and maintained a Buy rating ahead of earnings, while forecasting Q1 operating EPS slightly below consensus.
DTE Energy Company operates energy-related businesses and services in the United States.
9. NRG Energy, Inc. (NYSE:NRG)
On May 6, 2026, NRG Energy, Inc. (NYSE:NRG) reported Q1 adjusted EPS of $1.49 compared to $1.73 consensus, while revenue came in at $10.26B versus $8.64B expected. CEO Robert Gaudette said the company’s generation fleet performed well and its retail and commercial businesses continued delivering reliable and affordable power. He added that demand remains strong and that NRG is positioned to capitalize on future opportunities with momentum across the business heading into the summer season. NRG maintained its FY26 adjusted EPS outlook of $7.90-$9.90, compared to consensus estimates of $9.06.
Ahead of the earnings release, Raymond James lowered its price target on NRG Energy, Inc. to $210 from $220 and maintained a Strong Buy rating. The firm said Q1 results across the independent power producer group were expected to be mixed, with NRG likely facing softer near-term results due to weaker ERCOT weather conditions, lower load, and softer power prices.
Meanwhile, Morgan Stanley raised its price target on NRG Energy, Inc. to $159 from $154 and maintained an Equal Weight rating on the shares.
NRG Energy, Inc., together with its subsidiaries, operates as an energy and home services company in the United States and Canada.
8. American Electric Power Company, Inc. (NASDAQ:AEP)
On May 6, 2026, Scotiabank raised its price target on American Electric Power Company, Inc. (NASDAQ:AEP) to $140 from $131 previously and maintained a Sector Perform rating on the shares. The firm pointed to the company’s “robust” EPS growth outlook, which was again increased to a greater-than-9% CAGR following recently announced capital projects.
On May 5, 2026, American Electric Power Company, Inc. reported Q1 operating EPS of $1.64, above the $1.57 consensus estimate, while revenue came in at $5.46B versus $5.72B expected. Chief Executive Officer Bill Fehrman said AEP continues executing on its strategic plan while maintaining a focus on affordability amid rising demand growth, particularly from data centers and other large-load customers.
American Electric Power Company, Inc. also said that it continues to expect FY26 operating EPS in the range of $6.15 to $6.45 per share.
American Electric Power Company, Inc. generates, transmits, and distributes electricity to retail and wholesale customers in the United States.
7. Ormat Technologies, Inc. (NYSE:ORA)
On May 6, 2026, Ormat Technologies, Inc. (NYSE:ORA) reported Q1 adjusted EPS of $1.30, well above the 90c consensus estimate, while revenue rose to $403.9M from expectations of $349.2M. Chief Executive Officer Doron Blachar said the company delivered strong growth across all business segments, with operating income rising 57.6% year over year, adjusted EBITDA increasing 29.7%, and adjusted diluted EPS climbing 91.2%. He added that the performance reflected continued strength in Ormat’s Energy Storage and Product segments alongside the resilience of its diversified portfolio.
Ormat Technologies, Inc. expects FY26 revenue of $1.11B-$1.16B compared to consensus estimates of $1.14B, while adjusted EBITDA is projected at $615M-$645M.
Last month, JPMorgan lowered its price target on Ormat Technologies, Inc. to $106 from $108 and maintained a Neutral rating as part of a broader clean energy and power infrastructure sector update ahead of Q1 earnings. The firm said the sector continues to operate in a “catalyst-rich environment,” supported by data center contract announcements and rising order volumes, while maintaining a preference for companies with U.S.-based manufacturing exposure, diversified end markets, and strong balance sheets.
Ormat Technologies, Inc. operates geothermal and recovered energy power businesses across the United States and several international markets.
6. Constellation Energy Corporation (NASDAQ:CEG)
On May 1, 2026, Morgan Stanley raised its price target on Constellation Energy Corporation (NASDAQ:CEG) to $361 from $360 previously and maintained an Overweight rating on the shares.
Meanwhile, TD Cowen lowered its price target on Constellation Energy Corporation to $381 from $390 while keeping a Buy rating. The firm said it expects a “relatively quiet quarter,” with earnings modestly higher year over year due to capacity pricing.
Scotiabank analyst Andrew Weisel also lowered the price target on Constellation Energy Corporation to $441 from $481 and maintained an Outperform rating. Despite the lower target, the firm said it expects solid Q1 results and remains bullish on the stock.
Earlier, Raymond James analyst J.R. Weston lowered the firm’s price target on Constellation Energy Corporation to $392 from $406 and kept an Outperform rating. The analyst said Q1 results across the independent power producer group are expected to be mixed, though Constellation is projected to report results broadly in line with expectations despite some uncertainty tied to Calpine.
Constellation Energy Corporation produces and sells electricity, natural gas, and energy-related products and services in the United States.
5. Pinnacle West Capital Corporation (NYSE:PNW)
On May 5, 2026, Barclays analyst Nicholas Campanella raised the firm’s price target on Pinnacle West Capital Corporation (NYSE:PNW) to $102 from $101 and maintained an Equal Weight rating following the company’s Q1 report. The analyst said Pinnacle West delivered a solid start to 2026, though the first quarter represents a relatively small portion of the company’s full-year earnings contribution.
On May 4, 2026, Pinnacle West Capital Corporation reported Q1 EPS of 27c, ahead of the 1c consensus estimate, while revenue came in at $1.15B compared to expectations of $1.08B. The company said results benefited from higher transmission revenues, lower operations and maintenance expenses, weather impacts, and customer growth and usage trends, partially offset by higher interest expense, income taxes, and depreciation costs. CEO Ted Geisler said Arizona experienced its warmest winter on record, with elevated temperatures continuing into spring, resulting in stronger-than-normal energy usage from retail customers during the quarter. Pinnacle West maintained its FY26 EPS outlook of $4.55-$4.75, compared to consensus estimates of $4.70.
Ahead of earnings, Morgan Stanley analyst David Arcaro lowered the firm’s price target on Pinnacle West Capital Corporation to $98 from $99 and maintained an Equal Weight rating as part of a broader update on North American regulated and diversified utilities and IPPs.
Pinnacle West Capital Corporation, through its subsidiary, provides retail and wholesale electric services in Arizona.
4. Portland General Electric Company (NYSE:POR)
On May 1, 2026, Portland General Electric Company (NYSE:POR) reported Q1 EPS of 58c, versus the 77c consensus estimate, while revenue came in at $879M compared to expectations of $954.96M. CEO Maria Pope said the company remains focused on disciplined execution, adding that strong operational performance and cost controls helped offset the impact of an unusually mild winter.
Portland General Electric Company maintained its FY26 EPS outlook of $3.33-$3.53 compared to consensus estimates of $3.41. The company also maintained its FY26 capital expenditure plan of $1.66B and expects its effective tax rate for the year to remain between 15% and 20%. Weather-adjusted energy deliveries are expected to increase between 1.5% and 2.5%.
Ahead of the earnings report, Wells Fargo analyst Shahriar Pourreza raised the firm’s price target on Portland General Electric Company to $51 from $49 and maintained an Equal Weight rating. The firm updated its Q1 estimates across regulated utility coverage following discussions with management teams.
Portland General Electric Company is an integrated electric utility engaged in the generation, wholesale purchase, transmission, distribution, and retail sale of electricity in Oregon.
3. TransAlta Corporation (NYSE:TAC)
On May 6, 2026, TransAlta Corporation (NYSE:TAC) reported Q1 adjusted EPS of C$0.60 compared to C$0.10 last year. Revenue came in at C$565M versus C$758M a year ago, while free cash flow totaled C$102M compared to C$139M last year. By segment, Q1 hydro adjusted EBITDA declined to C$35M from C$47M last year, wind and solar adjusted EBITDA fell to C$95M from C$102M, gas adjusted EBITDA decreased to C$93M from C$104M, and energy transition adjusted EBITDA dropped to C$1M from C$37M. CEO Joel Hunter said the company’s hedging strategy and contracted portfolio helped support performance despite a difficult pricing environment.
TransAlta Corporation maintained its FY26 adjusted EBITDA outlook of C$950M-C$1.05B. The company said its long-term opportunity set remains significant despite near-term challenges in Alberta, with Hunter adding that the company remains confident in its 2026 outlook.
Last month, TransAlta announced the appointment of Mike Politeski as Executive Vice President, Finance and CFO, effective May 1, 2026, and Grant Arnold as Executive Vice President, Growth and Chief Commercial Officer, effective May 6, 2026. The leadership changes follow Joel Hunter’s transition from CFO to President and CEO on April 30, 2026, succeeding retiring CEO John Kousinioris.
TransAlta Corporation develops, produces, and sells electric energy.
2. Duke Energy Corporation (NYSE:DUK)
On May 6, 2026, Mizuho raised its price target on Duke Energy Corporation (NYSE:DUK) to $139 from $130 previously and maintained an Outperform rating on the shares.
On May 5, 2026, Duke Energy Corporation reported Q1 adjusted EPS of $1.93, ahead of the $1.80 consensus estimate, while revenue came in at $9.18B compared to expectations of $8.49B. CEO Harry Sideris said the company continues investing in generation capacity and grid infrastructure to support economic growth across its service territories while working to keep customer rates manageable. Duke maintained its FY26 adjusted EPS outlook of $6.55-$6.80, compared to consensus estimates of $6.70.
Last month, the U.S. Nuclear Regulatory Commission renewed the operating license for Duke Energy’s Robinson Nuclear Plant for an additional 20 years, extending the facility’s operating life through 2050. Located in Hartsville, South Carolina, the plant generates enough electricity to power about 570,000 homes.
Also in April, Morgan Stanley lowered its price target on Duke Energy Corporation to $141 from $142 while maintaining an Overweight rating as part of a broader update on North American regulated and diversified utilities and IPPs.
Duke Energy Corporation, through its subsidiaries, operates electric and gas utility businesses in the United States.
1. Vistra Corp. (NYSE:VST)
On May 4, 2026, TD Cowen analyst Shelby Tucker lowered the firm’s price target on Vistra Corp. (NYSE:VST) to $230 from $253 previously and maintained a Buy rating on the shares. The firm expects Vistra to report a quiet quarter, with earnings modestly higher year over year.
On April 27, 2026, Raymond James lowered its price target on Vistra Corp. to $208 from $240 and kept a Strong Buy rating. The firm said Q1 results across the independent power producer group are expected to be mixed, with limited broader read-through. Raymond James expects Vistra’s near-term results to reflect softer ERCOT weather, lower load, and weaker power prices, though impacts may vary depending on retail and supply exposure.
Morgan Stanley analyst David Arcaro also lowered the price target on Vistra Corp. to $208 from $214 while maintaining an Overweight rating on the shares. The firm said the target change was part of a broader update to its North American regulated and diversified utilities and IPP coverage following utility outperformance versus the S&P in March.
Vistra Corp. operates an integrated retail electricity and power generation business in the United States.
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