American Electric Power Company, Inc. (AEP): A Bull Case Theory 

We came across a bullish thesis on American Electric Power Company, Inc. on Paradox’s Substack by PARADOX INTELLIGENCE. In this article, we will summarize the bulls’ thesis on AEP. American Electric Power Company, Inc.’s share was trading at $115.66 as of October 6th. AEP’s trailing and forward P/E were 16.64 and 18.12 respectively according to Yahoo Finance.

20 Countries With Highest Cost Of Electricity

chungking/Shutterstock.com

American Electric Power (AEP) is a transmission-focused utility positioned to benefit from the accelerating demand for electricity infrastructure, particularly driven by data center growth. Approximately 55% of the company’s earnings stem from its transmission segment, which is expected to see meaningful incremental load of 4.7 GW in 2025.

This growth is supported by a substantial $70 billion capital expenditure program aimed at expanding and modernizing its transmission network. AEP’s financial performance has been strong, highlighted by record earnings in Q2 2025 and a projected 6–8% earnings growth rate, with the transmission segment consistently delivering the highest returns among its business units.

The company has established strategic relationships with major hyperscalers, including Amazon, Google, Microsoft, and Meta, evidenced through interconnection agreements and favorable rate cases, which provide both revenue visibility and growth optionality. Despite these advantages, AEP faces potential headwinds from regulatory and operational factors, including permitting timelines for new transmission corridors, the lag between capital expenditures and cost recovery, and the risk of regulatory disallowances that could affect returns.

Nevertheless, the company’s dominant transmission positioning, long-term investment program, and strong hyperscaler relationships suggest a favorable risk-reward profile, with the potential for continued earnings growth and strategic value capture from the evolving energy infrastructure landscape. Investors can view AEP as a play on both the secular expansion of the transmission grid and the specific acceleration of high-demand, data center-driven electricity consumption, with multiple levers supporting upside while regulatory execution remains the key variable.

Previously we covered a bullish thesis on Evergy, Inc. (EVRG) by Hidden Market Gems in April 2025, which highlighted its defensive positioning, resilience amid macro uncertainty, high dividend yield, and low volatility. The stock has appreciated approximately 18.88% since coverage. The thesis still stands, while PARADOX INTELLIGENCE emphasizes AEP’s transmission-driven growth, hyperscaler relationships, and large-scale capex, showing a more expansion-oriented upside.

American Electric Power Company, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held AEP at the end of the second quarter which was 55 in the previous quarter. While we acknowledge the risk and potential of AEP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AEP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW

Disclosure: None.