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 (NYSE:SO) to $105 from $104 previously while maintaining an Outperform rating on the shares.
On April 30, 2026, The Southern Company (NYSE:SO) 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 (NYSE:SO), 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 (NYSE:ETR) 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 (NYSE:ETR) 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 (NYSE:ETR) 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 (NYSE:ETR) produces and distributes electricity across the United States.
