US utilities rise in 2024 driven by AI boom

NiSource

31/12/2024 18:26

** Shares of U.S.-based utilities rose in 2024 with Vistra
Corp  VST.N  gaining nearly 260% YTD and Constellation Energy
 CEG.O  91.3% YTD
    ** VST is the second biggest gainer in the S&P 500  .SPX ,
higher than A.I. favorite Nvidia  NVDA.O 
    ** Utility gains this year has been helped by a surge in
demand for power for growing artificial intelligence needs and
data center expansions
    ** Utilities are often referred to as "bond proxies," for
their strong, stable dividends that compete with Treasury yields
    ** In September, CEG and Microsoft  MSFT.O  had signed a
power deal to help resurrect a unit of the Three Mile Island
nuclear plant in Pennsylvania 
    ** Public Service Enterprise  PEG.N  up 37.6% YTD and
NiSource  NI.N  up ~38% YTD
    ** "Sector strength in 2024 has been underpinned by
stabilizing rates and inflationary expectations throughout the
year, greater uncertainty created by the election cycle for many
non-utility sectors," said KeyBanc Capital Markets earlier in
December
    ** Brokerage said the growing realization among investors
that AI-driven electricity demand is not a fad has been
translated into tangible load growth and earnings per share
growth target revisions
    ** NextEra Energy  NEE.N  and Evergy  EVRG.O  also up ~18%
YTD and 17.3% YTD

 (Reporting by Pooja Menon in Bengaluru)
 ((Pooja.Menon@thomsonreuters.com;))