From Nasdaq: 2024-11-21 05:12:00

Artificial intelligence (AI) is predicted to be the defining technology of the next decade, with Bill Gates comparing it to the creation of the microprocessor and internet. Investors are eyeing technology companies like Palantir and Nvidia, as well as Vistra from the utilities sector, which is currently the best-performing stock in the S&P 500.

U.S. electricity demand is set to rise at 2.4% annually through 2030, driven by AI data centers. These centers will consume 8% of U.S. power by the end of the decade, more than double the consumption in 2022. Investors can benefit from this trend by investing in the Vanguard Utilities ETF, which provides exposure to electric utilities.

The Vanguard Utilities ETF includes 66 U.S. companies from the utilities sector, with a focus on electricity distributors and companies offering multiple utility services. The top holdings include NextEra Energy, Southern Company, and Duke Energy. Seven of the top 10 holdings have outperformed the S&P 500 year to date, with Vistra leading the pack with a total return exceeding 300%.

Constellation Energy, a dominant player in nuclear power, is the second-best performing stock on the list. AI data centers are energy-intensive, making nuclear energy a potential solution due to its reliability. While the Vanguard Utilities ETF has underperformed the S&P 500 over the long term, it offers low volatility and a below-average expense ratio.

Investors are urged to consider the Vanguard Utilities ETF for exposure to the AI boom, as electricity demand surges. The fund may outperform as a result, providing a potentially lucrative opportunity. “Double Down” stock recommendations for companies poised to pop are also being issued, offering investors a second chance at high returns.



Read more at Nasdaq: A Once-in-a-Decade Investment Opportunity: 1 Little-Known Vanguard Index Fund to Buy for the Artificial Intelligence (AI) Boom