Utility Stocks Pivot Toward Data Center Demand
American Electric Power, American Water Works, and Black Hills are positioning themselves to capitalize on the growing demand for energy and resources from data centers. The global data center market is expected to increase from $300 billion in 2026 to approximately $699 billion by 2034. As part of this shift, American Electric Power plans to invest $72 billion over five years to support infrastructure, while American Water Works pursues a merger with Essential Utilities to enhance water services for data centers.
American Electric Power serves over 5 million customers across 11 states, currently yielding around 2.8% in dividends. American Water Works holds a 2.5% dividend yield and is focused on new revenue opportunities through its merger. Black Hills, which operates in eight states and has over 1.3 million customers, has already tapped into data center partnerships and is working toward a merger with NorthWestern Energy Group, which could bolster resources and dividends, currently yielding 3.7%.
