Data centers trigger a tsunami of electricity demand, Gabeelli Fund names four major beneficiary stocks.

Electricity demand is growing at the fastest rate since the 1960s and 1970s, and all types of demand forecasts are on the rise. The large-scale construction of artificial intelligence is expected to require unprecedented additional generating capacity, with data center capacity expected to increase from 45 gigawatts to over 130 gigawatts by 2030, achieving threefold growth. The Gabelli Fund singled out WEC Energy Group, American Electric Power Company, Inc., Evergy, Inc., and Pinnacle West Capital Corporation as the four stocks that will benefit. The main demand comes from super large-scale tech companies, including Amazon.com, Inc. (AMZN.US), Microsoft Corporation (MSFT.US), Meta (Meta.US), and Alphabet (GOOGL.US). These companies require massive amounts of electricity, and it is estimated that in just one year, 2025, they will spend about $350 billion on artificial intelligence infrastructure alone, not including similar investments from other companies like OpenAI and Oracle Corporation (ORCL.US). Gabelli Fund portfolio manager Tim Winter said in a report this week that at least four stocks are expected to benefit from this trend. In Wisconsin, WEC Energy Group (WEC.US) is providing support for Microsoft Corporation's 1.8-gigawatt data center construction. This data center is one of the first super large-scale data centers currently under construction, with phased operations planned to begin in 2026. Winter estimates that the power demand of just this facility will increase Wisconsin Electric Company's peak load by 20%. American Electric Power Company, Inc. (AEP.US) has raised its earnings per share (EPS) growth rate guidance from 6%-8% to 7%-9%. Behind this adjustment is the expectation that peak demand will add 28 gigawatts by 2030 (including 22 gigawatts from data centers). The company has also raised its five-year capital investment plan to $72 billion, with 190 gigawatts of customer projects currently waiting to connect to its power system. Evergy, Inc. (EVRG.US) is a sturdy utility company serving Missouri and Kansas, with a current target EPS growth rate of 4%-6% based on a signed 500-megawatt load build plan. The company currently has 15 gigawatts of project reserves waiting for budget approval, and Winter expects some projects to be approved for addition by the end of the year, which could lead to an increase in its EPS growth rate, bringing strong positive prospects. Pinnacle West Capital Corporation (PNW.US) has a target EPS growth rate of 5%-7%. Population growth in Arizona is providing support for the company, and it is adding a large 5-gigawatt load, partly powered by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's $165 billion investment in its service area Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR plans to build six large chip manufacturing plants there.