"The S&P 500 utilities sector has gained well over 15% in 2025. Equities will be affected if the major stock market indices experience another significant decline similar to the one earlier this year. However, history shows that stodgy utility stocks are likely to hold their ground much better than high-flying technology stocks, especially those chasing the artificial intelligence mania. Oddly enough, AI and data center growth are becoming a massive tailwind"
"Large hyperscale data centers, which are increasingly common, require the power of 100 megawatts or more, equivalent to the annual electricity consumption of around 350,000 to 450,000 electric cars. This skyrocketing demand is only expected to continue as the adoption of AI continues to grow. A significant portion of data center energy consumption comes from cooling systems that maintain optimal operating temperatures. Big tech will continue to find solutions for this issue."
Utilities stocks have surged, with the S&P 500 utilities sector up over 15% in 2025. Utilities tend to outperform during market declines because demand for electricity remains stable across the business cycle. Rapid growth in AI and hyperscale data centers is increasing power demand, particularly for cooling, with large facilities requiring 100+ megawatts—roughly the annual consumption of 350,000–450,000 electric cars. That structural demand creates a tailwind for utilities while exposing investors to technology growth without direct tech equity risk. J.P. Morgan identifies four Buy-rated utility leaders suitable for growth-and-income investors, with tariffs posing minimal sector risk.
Read at 24/7 Wall St.
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