5 energy stocks that will benefit from expanding electricity demand

• From data centers to transportation electrification, the U.S.’s demand for electricity is increasing, according to BofA.

• By 2035, as much as 300 gigawatts of usable capacity could be needed to power the country.

• This means gains in five domestic utility stocks, the bank said.

U.S. electricity demand is skyrocketing as resources flow into infrastructure and technology. Bank of America believes five major utility stocks are gaining momentum as the economy becomes increasingly power-hungry.

Analysts said on Monday: “There is evidence of a return to demand growth due to the return of industry, the development of data and cryptocurrency mining centers, and the electrification of buildings, transportation and infrastructure.”

Although electricity consumption has declined over the past two decades, the bank projects that the U.S. will need 100 gigawatts of effective capacity by 2035. This represents a national annual growth rate of 1.5% compared to 0.5% from 2015 to 2024.

However, BofA’s high-case scenario could require as much as 300 gigawatts of electricity demand instead.

One of the factors driving this trend is artificial intelligence. The bank has previously said this alone could require as much as 28 gigawatts of usable capacity by 2026.

Although this varies significantly by region, analysts have named five utilities that could benefit from the acceleration. SempraNorthwestern Energy; pinnacle west, entertainmentand TXNM.

1. Entertainment Based on BofA’s price target of $138 per share, this represents a 3.6% upside from current levels. This is based on aggregate analysis in 2026 and expectations that the utility’s 15.4x price-to-earnings ratio will rise by more than 5%.

In 2024, power distribution companies have soared more than 30% year-to-date. it’s already played a role In building a new AI data center, contributed to the expansion Electric vehicle charging grid.

2. Sempra That’s a 13% upside based on the bank’s $94 price target. Goldman Sachs similarly promoted the infrastructure company and We support the growth of data centers in Texas.

3. Northwestern Energy Boffa said the stock could similarly rise more than 13% to reach its $65 price target.

“Given Montana’s improved regulatory treatment and sector-average EPS growth without equity dilution, we value NWE at an inline multiple, with upside likely to occur after 2026,” the analysts wrote. is high.” “Between a more constructive regulatory structure and a stronger balance sheet, we believe NWE is differentiated compared to other small-cap utilities.”

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4. Pinnacle West BofA’s price target of $93 per share suggests an upside of 4.6%. The bank has previously promoted PNW among high-quality value stocks. Worth owning to hedge volatility.

5.TXNM Energy The stock is expected to rise 10% from current levels to reach its price target of $48 per share.

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