Investing.com -- Power and utility companies are expected to see continued momentum in 2026 as artificial intelligence drives unprecedented demand for electricity, according to a new report from Evercore ISI.
{{pro_promotion | Get more stock picks by Wall Street analysts by upgrading to InvestingPro - get 55% off today}}
The firm highlights eight top picks positioned to capitalize on what they call the "Race to Power" as data center operators scramble to secure reliable energy sources.
With announced projects already exceeding 125GW of incremental demand, 2026 is shaping up to be a pivotal year for the power sector.
Evercore analysts expect the year to bring numerous "off-cycle" catalyst announcements as hyperscalers lock in long-term power agreements to support their ambitious growth plans.
Here are Evercore ISI’s top power stock picks for 2026:
1. NextEra Energy, Inc (NYSE:NEE) - Leading the pack, NextEra maintains its position as the premier renewable energy provider in the United States. The company’s dual strategy of operating regulated utilities while developing clean energy projects positions it perfectly to meet the growing demand from data centers requiring both reliable and sustainable power sources.
NextEra Energy reported fourth-quarter 2025 adjusted earnings of $0.54 per share on revenue of $6.5 billion, which was below revenue expectations. Following the results, Mizuho raised its price target on the company to $90.
2. Vistra Corp (NYSE:VST) - As a major integrated power company, Vistra’s diverse generation portfolio and retail operations give it significant flexibility to capitalize on increasing power demand. The company’s combination of conventional and renewable assets provides the dispatchable power that data centers require.
In a significant development, Vistra Corp secured power purchase agreements with Meta for its nuclear assets. The company also completed a private offering of $2.25 billion in senior secured notes.
3. Sempra (NYSE:SRE) - This energy infrastructure company stands to benefit from its strategic assets across the power value chain. Sempra’s investments in natural gas infrastructure complement its utility operations, providing essential services as power demand surges.
Sempra announced third-quarter 2025 earnings that surpassed analyst forecasts, with an adjusted EPS of $1.11. Additionally, Goldman Sachs upgraded the company to a Buy rating, citing its focus on Texas operations.
4. American Electric Power Company (NASDAQ:AEP) - With one of America’s largest electricity transmission networks, AEP is well-positioned to connect new power generation to growing demand centers. The company’s extensive service territory includes regions seeing significant data center development.
American Electric Power announced a $2.65 billion agreement to purchase solid oxide fuel cells from Bloom Energy for a new generation facility. The company also reached an agreement with the Icahn Group to add a non-voting observer to its board.
5. Xcel Energy (NASDAQ:XEL) - As a leader in clean energy transition among regulated utilities, Xcel has established itself as a preferred partner for tech companies seeking renewable power. Its ambitious carbon reduction goals align with the sustainability requirements of many AI-focused companies.
A subsidiary of Xcel Energy filed a request in Colorado for a $190 million increase in natural gas revenue. Separately, Mizuho raised its price target on the company to $86, citing a strong growth outlook.
6. Public Service Enterprise Group (NYSE:PEG) - PSEG’s northeastern utility operations serve densely populated areas with growing power needs. The company’s focus on grid modernization supports the reliability requirements essential for data center operations.
Public Service Enterprise Group received an upgrade to Overweight from Wells Fargo. The company also announced that Geisha J. Williams will join its Board of Directors, effective March 1, 2026.
7. Bloom Energy (NYSE:BE) - Offering innovative fuel cell solutions, Bloom provides distributed generation options that can help data centers ensure power reliability while meeting environmental goals. Its technology addresses both energy security and emissions concerns.
In recent news, an air permit filing in Texas revealed that Bloom Energy’s fuel cells are planned to power a new 1.5 GW off-grid data center. This development follows a major purchase agreement from American Electric Power for Bloom’s technology.
8. Fermi (NYSE:FRMI) - Rounding out the list, Fermi’s specialized focus on grid infrastructure positions it to benefit from the massive investments needed to connect new generation to the grid as power demand accelerates.
Fermi announced that a prospective tenant terminated a $150 million construction funding agreement for one of its sites. On a separate note, Texas Capital Securities initiated coverage on the company with a Buy rating.
According to Evercore, if 2025 was the year of "price discovery" in the power sector, 2026 will be the year of "price certainty" as long-term agreements solidify the economic outlook for these companies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
