AEP, ETR: 2 Under-The-Radar Utility Stocks Have Soared On AI Energy Boom — Are Retail Traders Taking Notice?

American Electric Power (AEP) and Entergy (ETR) have quietly attracted the attention of retail traders amid soaring demand for electricity driven by the growth of artificial intelligence (AI) data centers.

The companies, which topped Wall Street’s estimates for quarterly profit on Wednesday, have outperformed the broader utility sector this year. AEP stock has surged 22.2% while Entergy has gained 18.6%, compared with 12.2% gains of the S&P 500 utilities sector.

Tracking the gains, more traders have added the stocks to their watchlist over the past year. Entergy stock has seen a 36% rise in watchers, while 6.7% more traders have added AEP stock to their watchlists.

Retail sentiment on Stocktwits about AEP was in the ‘extremely bullish’ territory at the time of writing, while traders were ‘bullish’ about Entergy.

U.S. power demand is growing at its fastest pace since World War II, as tech giants are investing billions in enhancing their artificial intelligence infrastructure. According to a report by Deloitte, power demand from AI data centers in the United States is expected to grow more than thirtyfold, reaching 123 gigawatts, up from 4 gigawatts in 2024.

AEP said on Wednesday it expects to have 24 gigawatts of incremental load by the end of the decade, up from our previously reported 21 gigawatts, “driven primarily by data centers, reshoring of manufacturing, and further economic development.” The company is also set to unveil a $70 billion capital plan to upgrade and develop infrastructure.

Entergy, which will power one of Meta Platforms Inc.’s giant data centers, raised its four-year capital spending plan by $3 billion to $40 billion and also forecasted a 13% rise in sales to industrial customers over the same period. The company also raised its earnings estimates for 2027 and 2028.

According to The Fly, brokerage Mizuho raised the price target for the stock to $97 from $95, noting that despite an increase in capital expenditure, Entergy did not increase its equity capital needs due to higher operating cash flows.

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