Utility stocks are on the rise due to AI industry growth and Federal Reserve rate cuts.

From Nasdaq.: 2024-09-27 07:15:00

Utility stocks have seen significant growth, with XLU climbing 31% in the past year. Investors turn to utilities for their defensive capabilities amidst market uncertainty post Federal Reserve rate cuts. AI industry growth boosts electricity demand, benefiting utility companies like DTE Energy, which boasts strong financials and expands infrastructure with a solar farm.

PG&E Corp in California capitalizes on data center demand and expects a 2-4% load increase by 2040, making it a strategic investment. Despite undervaluing, opportunities for growth exist with a forward P/E ratio of 14.6 and analyst target price of $21.55. Vistra Corp leads S&P 500 with 1-year returns of nearly 250%, fueled by data center demand and strategic acquisitions.

Utility stocks present a buy-and-hold opportunity for investors seeking passive income through dividends. These investments tap into the growing AI industry’s electricity demand, offering potential for significant growth.



Read more at Nasdaq.:: AI Boom and Rate Cuts Boost Utility Stocks: Best Growth Picks