Utility Stocks on Fire as Data Center Demand Explodes: 5 Strong Buy Giants

Due to their continuous 24/7/365 operations, data centers consume electricity constantly. These operations involve running large numbers of servers, cooling systems, networking equipment, and other infrastructure. The amount of electricity used by data centers varies widely based on size, capacity, efficiency, and geographic location, but demand is always present.

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The numbers are staggering, as data centers collectively account for a notable portion of global electricity usage. Worldwide, data centers consumed an estimated 415 terawatt-hours of electricity in 2024, which was about 1.5% of global electricity consumption. Experts think that figure has increased exponentially since then and could continue to grow every year for decades.

We decided to screen our 24/7 Wall Street utility stock database, looking for the high-yielding stocks that could benefit from this massive increase in electricity use. All offer stable and dependable passive income and are rated Buy by top Wall Street firms.

Why are we covering utility stocks?

The S&P 500 utilities sector has gained nearly 16% from its low in mid-February and has outperformed the S&P 500. Equities will be impacted if the major stock market indices experience a significant decline. However, history shows that stodgy and now in-demand utility stocks are likely to hold their ground much better than high-flying technology stocks, especially those chasing the artificial intelligence and cloud computing mania.

Canadian Utilities

Canadian Utilities Ltd. (CDUAF) is an ATCO company with approximately 5,000 employees and assets of $22 billion. With a strong 4.60% dividend and residing in a highly safe sector, this company is a steal at its current trading levels. Canadian Utilities engages in the electricity, natural gas, renewables, pipelines, liquids, and retail energy businesses in Canada, Australia, and elsewhere.

It operates through three segments:

• ATCO Energy Systems
• ATCO EnPower
• Corporate & Other segments

The ATCO Energy Systems segment provides regulated electricity transmission and distribution services in:

• Northern and central east Alberta
• The Yukon
• The Northwest Territories
• The Lloydminster area of Saskatchewan

This segment also provides integrated natural gas transmission and distribution services in Alberta, the Lloydminster area of Saskatchewan, and Western Australia. It owns and operates approximately 9,100 kilometers of natural gas pipelines, 11 compressor sites, approximately 3,600 receipt and delivery points, and a salt cavern natural gas storage peaking facility near Fort Saskatchewan, Alberta, in Canada.

The ATCO EnPower segment provides:

• Hydro
• Solar
• Wind
• Natural gas electricity generation
• Natural gas storage
• Industrial water solutions
• Clean fuels, including hydrogen, carbon capture, and underground storage projects, as well as related infrastructure
• Development in Alberta, the Yukon, the Northwest Territories, Australia, Ontario, Mexico, and Chile

The Corporate & Other segment retails electricity and natural gas, and provides whole-home solutions.

Dominion Energy

Dominion Energy Inc. (NYSE: D) is an integrated energy utility that offers electricity, natural gas, and related services. This company pays a strong 4.40% dividend and is well situated geographically to serve data centers hungry for power. It operates through four segments:

• Dominion Energy Virginia
• Gas Distribution
• Dominion Energy South Carolina
• Contracted Assets

The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.

The Gas Distribution segment engages in:

• Regulated natural gas gathering
• Transportation
• Distribution and sales activities
• Distributes nonregulated renewable natural gas

This segment serves residential, commercial, and industrial customers.

The Dominion Energy South Carolina segment generates, transmits, and distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.

The company’s portfolio of assets included approximately:

• 30.2 gigawatts of electric generating capacity
• 10,500 miles of electric transmission lines
• 85,600 miles of electric distribution lines
• 94,200 miles of gas distribution lines

Dominion serves approximately 7 million customers.

Duke Energy

Duke Energy Corp. (NYSE: DUK) is an American electric power and natural gas holding company headquartered in Charlotte, North Carolina. This is another excellent idea now. It is located in a growing part of the country, close to massive data centers, and pays a solid 3.28% dividend. Duke Energy operates through two segments:

• Electric Utilities and Infrastructure (EU&I)
• Gas Utilities and Infrastructure (GU&I)

The EU&I segment generates, transmits, distributes, and sells electricity in the Carolinas, Florida, and the Midwest.

To develop electricity, Duke Energy uses the following:

• Coal
• Hydroelectric
• Natural gas
• Oil
• Solar and wind sources
• Renewables
• Nuclear fuel

This segment also sells electricity to municipalities, electric cooperative utilities, and load-serving entities.

The GU&I segment distributes natural gas to:

• Residential
• Commercial
• Industrial
• Power generation natural gas customers

The segment also invests in pipeline transmission projects, renewable natural gas projects, and natural gas storage facilities.

Entergy

Entergy Corp. (NYSE: ETR) is an integrated energy company engaged primarily in electric power production and retail distribution operations in the Deep South of the United States. This top utility stock always makes sense for conservative investors and pays a solid 2.49% dividend.

The company operates primarily through a single segment, Utility. This segment includes the generation, transmission, distribution, and sale of electric power in portions of southern states and the City of New Orleans. The segment includes five retail electric utility subsidiaries:

• Entergy Arkansas
• Entergy Louisiana
• Entergy Mississippi
• Entergy New Orleans
• Entergy Texas

Entergy owns and operates power plants with approximately 25,000 MW of electric generating capacity. It delivers electricity to approximately 3 million utility customers.

Exelon

Exelon Corp. (NYSE: EXC) is the largest electric parent company in the United States by revenue and the largest regulated electric utility in the country.  This top utility stock always makes good sense now for conservative accounts and pays a dependable 3.29% dividend. Exelon is a utility services holding company engaged in the energy distribution and transmission businesses in the United States and Canada.

The company purchases and regulates retail sales of electricity and natural gas, as well as the transmission and distribution of these services to retail customers. It also offers support services, including:

• Legal
• Human resources
• Information technology
• Supply management
• Financial
• Engineering
• Customer operations
• Distribution and transmission planning
• Asset management
• System operations
• Power procurement services

The company serves:

• Distribution utilities
• Municipalities
• Cooperatives
• Financial institutions
• Commercial, industrial, governmental, and residential customers

Four Midstream Energy MLPs Offer Reliable Yields as High as 10%

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