AI Investments by Big Tech Set to Exceed $700 Billion This Year: Key Players Who Stand to Benefit

Key Points

• The four largest hyperscaler tech companies, including Amazon and Microsoft, are projected to spend up to $725 billion on capital expenditures in 2026, primarily for data centers and AI infrastructure.

• American Electric Power (AEP) reported a surge in contracted load expected by 2030, jumping to 63 gigawatts, with 89% allocated for data centers.

• AEP also increased its five-year capital investment plan to $78 billion, anticipating a compound annual growth rate of operating earnings of more than 9% through 2030.

In the first quarter of 2026, AEP added 7 gigawatts to its future contracted load, raising the total from 56 gigawatts to 63 gigawatts. The demand is particularly concentrated in Indiana, Ohio, Oklahoma, and Texas. In response to this growing need, AEP has adjusted its capital plan to allocate funds for new transmission and generation projects, with first-quarter revenue rising about 10% year-over-year to $6.0 billion.

However, AEP faces risks related to the pace of the regional grid’s infrastructure development and reliance on debt for funding its growth plan, including a recent $2.6 billion common stock offering. At a trading price of around $126 and a forward price-to-earnings ratio of about 20, AEP is seen as a premium utility in the market.