Historically, utility stocks have been safe havens for investors looking for consistent quarterly dividends and a buffer against economic downturns. Even during economic hardship, consumers typically pay their electricity bills. While those attributes remain important, they are no longer the primary reasons to invest in utility stocks today.
Utility stocks have excelled in 2024, capitalizing on one of the year’s major investment themes - artificial intelligence (AI). This is due to utilities supplying the electricity needed to power the massive AI data centers being constructed across the U.S. With that, companies in the utility industry are now splitting into two groups - those poised to benefit from the surging demand driven by artificial intelligence and those expected to experience slower growth.
