Utilities sector gains traction as AI-driven data centers push electricity consumption to unprecedented levels by 2026.
US power demand is projected to reach a record in 2026, driven by surging electricity needs from AI and cloud computing data centers. The shift is reshaping investor interest in utilities, traditionally a low-volatility sector, as AI adoption accelerates energy consumption.
Data centers consumed 448 trillion watt-hours globally last year, surpassing the power usage of all but 10 countries. This exponential growth has spotlighted utilities ETFs, such as the $9 billion Vanguard Utilities ETF (VPU), which allocates over 62% of its portfolio to electric utility stocks.
While not a direct AI play, VPU offers exposure to the infrastructure supporting AI’s power demands, diverging from traditional tech-focused investments.