Shares of power producers rose on renewed optimism about the artificial-intelligence boom.
One analyst said the utility sector has shed some of its “bond proxy” behavior, with elevated growth expectations due to AI power demand and other factors driving higher price-to-earnings multiples. That means dividend yields now often track growth expectations rather than Treasury rates.
“It’s important for utilities to show they’re able to sustain this elevated growth, that it’s long-term, and not just a flash in the pan,” said Alex Kania, analyst at brokerage BTIG. “It’s not just the data centers that are driving this. Even absent the sea change going on right now, there would be a real move in underlying demand dynamics. Despite headlines on electric vehicles, we are still looking for that to be a steady contributor to electricity demand — maybe not as great as we thought a couple of years ago.”
The Trump and Biden administrations’ efforts to “reshore industries” is another factor in the positive growth outlook, Kania said.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
December 18, 2025 17:44 ET (22:44 GMT)
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