US Data Center Capacity Hits Record, Power Demand Grows 2.8%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 21 2026
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Source: Benzinga
- Power Demand Surge: In 2025, the U.S. added a record 10 gigawatts of new data center capacity, driving overall power demand growth to 2.8% year-over-year, marking the fastest pace in two decades and highlighting the significant impact of data centers on the power market.
- Market Tightness: The PJM power market reached a state of 'critical tightness' in 2025, with effective spare generation capacity dipping below 15%, slowing the approval pace for new data center loads and potentially impacting short-term expansions.
- Policy Risk Impact: President Trump proposed mandatory participation of major tech firms in electricity auctions, which could increase costs for building and operating data centers; however, analysts believe the impact on future data center demand will be limited.
- Investment Opportunities: Amid surging power demand, utilities in Virginia, Texas, and Ohio, such as Dominion Energy and American Electric Power, are poised to benefit from increased electricity sales, driving infrastructure investment.
Analyst Views on AEP
Wall Street analysts forecast AEP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AEP is 127.27 USD with a low forecast of 107.00 USD and a high forecast of 139.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
7 Buy
8 Hold
1 Sell
Moderate Buy
Current: 119.430
Low
107.00
Averages
127.27
High
139.00
Current: 119.430
Low
107.00
Averages
127.27
High
139.00
About AEP
American Electric Power Company, Inc. is an electric public utility holding company. Its electric utility operating companies provide generation, transmission and distribution services to more than five million retail customers in Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. Its segments include Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco and Generation & Marketing. The Vertically Integrated Utilities is engaged in the generation, transmission and distribution of electricity for sale to retail and wholesale customers. The Transmission and Distribution Utilities consists of the transmission and distribution of electricity for sale to retail and wholesale customers. The AEP Transmission Holdco is engaged in development, construction and operation of transmission facilities. The Generation & Marketing segment conducts Marketing, risk management and retail activities.
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.
