Rising data center power needs drive utility earnings beats, lifting sector outlook despite broader S&P 500 underperformance.
Twelve of 16 utility stocks surpassed second-quarter earnings per share estimates this week, fueled by surging demand from data centers. Companies like CenterPoint Energy and FirstEnergy are increasing long-term capital investments to meet large-load contracts, signaling sustained growth potential for the sector.
While utilities have outperformed year-to-date, they continue to trail the S&P 500. Exelon, however, trimmed its data center forecasts amid concerns over higher consumer bills, highlighting tensions between expansion opportunities and affordability pressures.
The earnings beats have reinforced investor confidence in the sector, with stocks gaining traction as power demand from tech-driven infrastructure accelerates.