Utilities Rebound As AI Powers Energy Demand: 3 ETFs To Watch
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 14 2025
0mins
Source: Benzinga
Utilities Sector Rebound: The utilities sector, previously lagging in 2023, has rebounded significantly in 2024 due to increased electricity demand from artificial intelligence and decarbonization trends, benefiting ETFs like Utilities Select Sector SPDR Fund, Vanguard Utilities ETF, and Fidelity MSCI Utilities Index ETF.
Growing Energy Demand: Data centers, which are crucial for digital operations, are expected to increase their power consumption dramatically, with annual growth rates for utility demand projected to rise from 1%-2% to 6%-8% over the next decade, highlighting the importance of utility providers in meeting this energy need.
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Analyst Views on VST
Wall Street analysts forecast VST stock price to rise
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 148.020
Low
217.00
Averages
240.09
High
287.00
Current: 148.020
Low
217.00
Averages
240.09
High
287.00
About VST
Vistra Corp. is an integrated retail electricity and power generation company that provides essential resources to customers, businesses, and communities from California to Maine. It operates a reliable power generation fleet of natural gas, nuclear, coal, solar, and battery energy storage facilities while taking an innovative, customer-centric approach to its retail business. Its segments include Retail, Texas, East, West, and Asset Closure. The Retail segment is engaged in retail sales of electricity and natural gas to residential, commercial and industrial customers. The Texas and East segments are engaged in electricity generation, wholesale energy sales and purchases, commodity risk management activities, fuel procurement, and logistics management. The West segment represents results from the CAISO market, including its battery ESS projects at its Moss Landing power plant site. The Asset Closure segment is engaged in the decommissioning and reclamation of retired plants and mines.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Former Amazon CEO Leads New AI Venture with $10 Billion Backing
- Leadership in AI Initiative: Former Amazon Web Services CEO Adam Selipsky is spearheading Helix Digital Infrastructure, a new AI venture backed by $10 billion from KKR and other investors, reflecting strong market confidence in AI infrastructure.
- Community Engagement Strategy: Selipsky emphasizes that Helix will engage with local communities transparently and honestly, aiming to gain support by providing job, tax, and economic benefits, although he acknowledges that some projects may not proceed due to local opposition.
- Water Resource Management Commitment: He highlights the continuation of the water-positive pledge made during his AWS tenure, asserting that modern data center designs use significantly less water than traditional ones, aiming to alleviate community concerns over water shortages.
- Focus on Environmental Sustainability: Selipsky notes that Helix will address environmental and sustainability issues, including the adoption of new cooling technologies and water recycling methods, to counter public criticism regarding the environmental impact of data centers.
See More
Top 10 Stock Picks from Billionaires
- Growing Power Demand: Vistra anticipates a 5% to 6% increase in electricity demand in the ERCOT grid and a 2% to 3% growth in the PJM market, both figures exceeding historical averages, indicating strong growth potential in the power market.
- Nuclear Power Agreements: Meta signed a 20-year nuclear power purchase agreement for approximately 2.6 GW with Vistra, while Amazon secured a similar 1.2 GW agreement, reflecting major corporations' trust in Vistra's long-term power supply capabilities and further solidifying its market position.
- Flexible Power Supply: By utilizing gas-fired plants located near data centers to provide temporary electricity, Vistra ensures faster online deployment of data centers, which distinguishes it from traditional utilities and better meets the rapidly changing market demands.
- Attractiveness of Nuclear Assets: With increasing investor interest in nuclear assets, Vistra has gained higher recognition, especially after signing a large power purchase agreement for its Comanche Peak nuclear facility, positioning it to attract more significant deals in the future.
See More
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- Significant Revenue Growth: Bloom Energy's Q1 revenue surged 130% year-over-year to $751.1 million, driven by a 208% increase in product revenue, indicating strong demand in the data center market, with 2026 revenue projected to reach $3.4 to $3.8 billion, reflecting an approximately 80% growth.
- Surge in Power Equipment Orders: GE Vernova's Q1 orders increased 71% year-over-year to $18.3 billion, with gas turbine orders and slot reservations rising from 83 gigawatts to 100 gigawatts, showcasing robust demand for grid equipment, with expectations to reach at least 110 gigawatts by the end of 2026.
- Long-term Nuclear Agreements: Vistra has signed long-term nuclear power agreements with Amazon and Meta, providing up to 1,200 megawatts and 2,609 megawatts of nuclear energy, respectively, further solidifying its position in the competitive U.S. power market, with 2023 EBITDA expected to reach $6.8 to $7.6 billion.
- Market Risks and Opportunities: Despite facing risks related to project timing and demand fluctuations, ongoing demand signals suggest that the electricity bottleneck presents investors with a more grounded investment opportunity in the AI boom, particularly in the power infrastructure sector.
See More
Surge in AI Infrastructure Investments
- Financing Platform Launch: Broadcom, in collaboration with Apollo Global Management and Blackstone, has initiated a financing platform aimed at achieving over 20 gigawatts of AI compute capacity by 2028, starting with a $35 billion tranche, indicating strong market demand for AI infrastructure.
- Bloom Energy Revenue Surge: Bloom Energy reported a 130% year-over-year revenue increase in Q1, reaching $751.1 million, with product revenue soaring 208%, and it now expects 2026 revenue to hit between $3.4 billion and $3.8 billion, highlighting its market leadership in data center power solutions.
- GE Vernova Order Surge: GE Vernova's Q1 orders surged 71% year-over-year to $18.3 billion, pushing total backlog to $163 billion, reflecting robust demand in the grid equipment market, with expectations to reach at least 110 gigawatts of generation capacity by the end of 2026.
- Vistra Long-term Agreements: Vistra has signed 20-year power purchase agreements with Amazon and Meta to supply up to 2,609 megawatts of nuclear power, further solidifying its position among competitive power producers in the U.S., while also planning to acquire 5,500 megawatts of natural gas generation capacity to enhance market competitiveness.
See More
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- Strategic Transformation: LIXTE Biotechnology has announced its pivot from a clinical-stage cancer drug developer to a power infrastructure company, aiming to address the acute electricity shortages impacting the AI sector in the modern economy.
- Acquisition Plan: LIXTE has entered into an agreement to acquire NOMAD Transportable Power Systems, Inc., a leader in deployable utility-grade battery storage, and plans to rename itself NOMAD Power Solutions, marking a complete business metamorphosis.
- Market Demand: The North American Electric Reliability Corporation projects a 224-gigawatt increase in summer peak demand over the next decade, and LIXTE's transformation is a strategic response to this systemic electricity shortage, which is expected to drive business growth.
- Revenue Growth Expectations: NOMAD anticipates revenue growth of approximately 175% in 2025, 135% in 2026, and over 285% in 2027, highlighting LIXTE's significant market opportunities in the power infrastructure sector.
See More
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- Strategic Shift: LIXTE Biotechnology announced its acquisition of NOMAD Transportable Power Systems, pivoting from clinical cancer drug development to focus on power infrastructure, addressing the urgent electricity needs of the AI era.
- Market Opportunity: The North American Electric Reliability Corporation projects a 224-gigawatt increase in summer peak demand over the next decade, with LIXTE's transformation targeting this power shortage by offering NOMAD's deployable battery systems as a solution.
- Technological Advantage: NOMAD's systems are transportable and can be deployed quickly, circumventing the lengthy approval processes of traditional battery installations, with manufacturing capacity expected to grow from 2.5 gigawatts in 2026 to 3.5 gigawatts, meeting rising market demands.
- Revenue Growth Projections: NOMAD anticipates approximately 175% revenue growth in 2025, 135% in 2026, and over 285% in 2027, providing robust financial backing for LIXTE's transformation efforts.
See More
Former Amazon CEO Leads New AI Venture with $10 Billion Backing
- Leadership in AI Initiative: Former Amazon Web Services CEO Adam Selipsky is spearheading Helix Digital Infrastructure, a new AI venture backed by $10 billion from KKR and other investors, reflecting strong market confidence in AI infrastructure.
- Community Engagement Strategy: Selipsky emphasizes that Helix will engage with local communities transparently and honestly, aiming to gain support by providing job, tax, and economic benefits, although he acknowledges that some projects may not proceed due to local opposition.
- Water Resource Management Commitment: He highlights the continuation of the water-positive pledge made during his AWS tenure, asserting that modern data center designs use significantly less water than traditional ones, aiming to alleviate community concerns over water shortages.
- Focus on Environmental Sustainability: Selipsky notes that Helix will address environmental and sustainability issues, including the adoption of new cooling technologies and water recycling methods, to counter public criticism regarding the environmental impact of data centers.
See More
Top 10 Stock Picks from Billionaires
- Growing Power Demand: Vistra anticipates a 5% to 6% increase in electricity demand in the ERCOT grid and a 2% to 3% growth in the PJM market, both figures exceeding historical averages, indicating strong growth potential in the power market.
- Nuclear Power Agreements: Meta signed a 20-year nuclear power purchase agreement for approximately 2.6 GW with Vistra, while Amazon secured a similar 1.2 GW agreement, reflecting major corporations' trust in Vistra's long-term power supply capabilities and further solidifying its market position.
- Flexible Power Supply: By utilizing gas-fired plants located near data centers to provide temporary electricity, Vistra ensures faster online deployment of data centers, which distinguishes it from traditional utilities and better meets the rapidly changing market demands.
- Attractiveness of Nuclear Assets: With increasing investor interest in nuclear assets, Vistra has gained higher recognition, especially after signing a large power purchase agreement for its Comanche Peak nuclear facility, positioning it to attract more significant deals in the future.
See More
Bloom Energy Reports 130% Revenue Growth in Q1
- Significant Revenue Growth: Bloom Energy's Q1 revenue surged 130% year-over-year to $751.1 million, driven by a 208% increase in product revenue, indicating strong demand in the data center market, with 2026 revenue projected to reach $3.4 to $3.8 billion, reflecting an approximately 80% growth.
- Surge in Power Equipment Orders: GE Vernova's Q1 orders increased 71% year-over-year to $18.3 billion, with gas turbine orders and slot reservations rising from 83 gigawatts to 100 gigawatts, showcasing robust demand for grid equipment, with expectations to reach at least 110 gigawatts by the end of 2026.
- Long-term Nuclear Agreements: Vistra has signed long-term nuclear power agreements with Amazon and Meta, providing up to 1,200 megawatts and 2,609 megawatts of nuclear energy, respectively, further solidifying its position in the competitive U.S. power market, with 2023 EBITDA expected to reach $6.8 to $7.6 billion.
- Market Risks and Opportunities: Despite facing risks related to project timing and demand fluctuations, ongoing demand signals suggest that the electricity bottleneck presents investors with a more grounded investment opportunity in the AI boom, particularly in the power infrastructure sector.
See More
Surge in AI Infrastructure Investments
- Financing Platform Launch: Broadcom, in collaboration with Apollo Global Management and Blackstone, has initiated a financing platform aimed at achieving over 20 gigawatts of AI compute capacity by 2028, starting with a $35 billion tranche, indicating strong market demand for AI infrastructure.
- Bloom Energy Revenue Surge: Bloom Energy reported a 130% year-over-year revenue increase in Q1, reaching $751.1 million, with product revenue soaring 208%, and it now expects 2026 revenue to hit between $3.4 billion and $3.8 billion, highlighting its market leadership in data center power solutions.
- GE Vernova Order Surge: GE Vernova's Q1 orders surged 71% year-over-year to $18.3 billion, pushing total backlog to $163 billion, reflecting robust demand in the grid equipment market, with expectations to reach at least 110 gigawatts of generation capacity by the end of 2026.
- Vistra Long-term Agreements: Vistra has signed 20-year power purchase agreements with Amazon and Meta to supply up to 2,609 megawatts of nuclear power, further solidifying its position among competitive power producers in the U.S., while also planning to acquire 5,500 megawatts of natural gas generation capacity to enhance market competitiveness.
See More
LIXTE Biotechnology Transforms into Power Infrastructure Company
- Strategic Transformation: LIXTE Biotechnology has announced its pivot from a clinical-stage cancer drug developer to a power infrastructure company, aiming to address the acute electricity shortages impacting the AI sector in the modern economy.
- Acquisition Plan: LIXTE has entered into an agreement to acquire NOMAD Transportable Power Systems, Inc., a leader in deployable utility-grade battery storage, and plans to rename itself NOMAD Power Solutions, marking a complete business metamorphosis.
- Market Demand: The North American Electric Reliability Corporation projects a 224-gigawatt increase in summer peak demand over the next decade, and LIXTE's transformation is a strategic response to this systemic electricity shortage, which is expected to drive business growth.
- Revenue Growth Expectations: NOMAD anticipates revenue growth of approximately 175% in 2025, 135% in 2026, and over 285% in 2027, highlighting LIXTE's significant market opportunities in the power infrastructure sector.
See More
LIXTE Biotechnology Transforms into Power Infrastructure Company Amid AI Demand
- Strategic Shift: LIXTE Biotechnology announced its acquisition of NOMAD Transportable Power Systems, pivoting from clinical cancer drug development to focus on power infrastructure, addressing the urgent electricity needs of the AI era.
- Market Opportunity: The North American Electric Reliability Corporation projects a 224-gigawatt increase in summer peak demand over the next decade, with LIXTE's transformation targeting this power shortage by offering NOMAD's deployable battery systems as a solution.
- Technological Advantage: NOMAD's systems are transportable and can be deployed quickly, circumventing the lengthy approval processes of traditional battery installations, with manufacturing capacity expected to grow from 2.5 gigawatts in 2026 to 3.5 gigawatts, meeting rising market demands.
- Revenue Growth Projections: NOMAD anticipates approximately 175% revenue growth in 2025, 135% in 2026, and over 285% in 2027, providing robust financial backing for LIXTE's transformation efforts.
See More
