Data centers already reshaping electricity demand, with WEC, AEP, EVRG, PNW to benefit - Gabelli

[Electricity transmission towers with red glowing wires]
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Electric demand is rising at the fastest pace since the 1960s and '70s, and forecasts for demand all point upward, with the massive AI buildout expected to require an unprecedented amount of new power generation - capacity for data center growth is projected to triple from 45 GW to more than 130 GW by 2030.

The major players are the hyperscalers - Amazon, Microsoft, Meta, and Alphabet - which need massive amounts of power, and together expect to spend ~$350 billion on AI infrastructure in 2025 alone, which does not include OpenAI, Oracle, and others making similar investments.

At least four individual stocks are poised to benefit, Gabelli Funds portfolio manager Tim Winter said in a report this week.

In Wisconsin, WEC Energy (WEC [https://seekingalpha.com/symbol/WEC]) is supporting Microsoft’s construction of a 1.8 GW data center, one of the first mega data centers currently under construction and scheduled to come online in phases beginning in 2026; the demand from this single facility is expected to increase Wisconsin Electric's peak load by 20%, Winter estimated.

American Electric Power (AEP [https://seekingalpha.com/symbol/AEP]) raised its EPS growth rate guidance to 7%-9% from 6%-8%, driven by an expected 28 GW of additional peak demand through 2030 - including 22 GW from data centers - and it also hiked its five-year capital investment plan to $72 billion and has a 190 GW waiting list of customers seeking to interconnect to its system.

Evergy (EVRG [https://seekingalpha.com/symbol/EVRG]) is a more conservative utility serving Missouri and Kansas currently targeting 4%-6% EPS growth, based on an assumed 500 MW buildout of signed load, but it has a 15 GW project backlog awaiting budget approval; Winter expects to see part of this added by year-end, suggesting strong tailwinds for potential EPS growth upgrades.

Pinnacle West (PNW [https://seekingalpha.com/symbol/PNW]) targets 5%-7% earnings growth, helped by strong population growth in Arizona, and it is adding 5 GW of large load, driven in part by Taiwan Semiconductor's $165 billion investment in its service territory for six major chip fabrication facilities.

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