AI is Driving Utilities to Spend a Record $240 Billion in 2026. Buy These Stocks to Capitalize on the Power Surge.
Publish Date: 2026-07-04 12:35:00
Source Domain: www.theglobeandmail.com
Key Points
-
According to industry watchers, utilities could spend as much as $240 billion to meet AI power demand in 2026.
-
AI demand is pushing up power prices, leading to pushback against AI data centers.
-
Companies that can provide power outside of the grid could be set to prosper.
Companies are investing heavily in artificial intelligence (AI). That said, AI can’t “live” without electricity, so there’s been a huge increase in demand for power. In fact, some industry watchers expect the utility sector to spend as much as $240 billion in 2026 to meet AI demand. There are some problems for investors to consider here, and some solutions.
A step change in electricity demand
Electricity demand grew 10% between 2005 and 2025. It is expected to grow by 60% between 2025 and 2045. There are multiple reasons for the increase, but a key factor is artificial intelligence and the data centers that house AI. Given the massive capital investment in AI underway now, utilities have little choice but to ramp up their own investments. This spending is a growth catalyst for utilities.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
There’s just one problem. Regulated electric utilities pass on spending to consumers through rate increases. Rate increases have to be approved by regulators. With inflation running high and electricity costs already on the rise, there has been a pushback against AI investments. That could put pressure on utilities if they aren’t allowed to pass on all of their capital investment costs.
The best choice for investors may actually be to focus on companies that can provide power outside of the regulated framework. But you have to be careful as you make your final investment decisions.
