"Power shortage" ignites the US electric power stocks, but the "easy profit" feast may have come to an end.

With investors chasing companies that can meet the surging power demand of artificial intelligence, almost every sub-sector of the US power industry has recorded strong gains this year. The question now is whether this momentum still has room to continue. Winners abound in every corner of the energy industry: renewable energy and fossil fuels, established utility companies and speculative startups, even equipment manufacturers providing hardware for the generation of a new generation. What connects them is a simple imbalance: the long-term habit of slow growth and stable demand for electricity supply is struggling to keep up with the rapid expansion of data centers and artificial intelligence infrastructure. In the early rise driven by artificial intelligence, investors tended to invest in owners of nuclear power plants and natural gas power plants, including companies like Constellation Energy (CEG.US) and Vistra (VST.US). Since then, the enthusiasm has spread throughout the entire power ecosystem. Renewable energy stocks provide an example. At the beginning of this year, the industry faced pressure as legislators debated cutting subsidies for Clean Energy Fuels Corp. under the "Great Beautiful Act". By summer, once the outlines of these changes became clearer, renewable energy stocks rebounded. JPMorgan analyst Mark Strauss described it as a "catch-up trade", as investors re-evaluated the role of renewable energy in meeting the power needs related to artificial intelligence, this rebound was amplified. Exchange-traded funds tracking Clean Energy Fuels Corp. and CECEP Solar Energy have seen significant gains so far this year. This bull run has also spread to less traditional sources of energy such as geothermal. Ormat Technologies (ORA.US) has risen by about 65% this year, benefiting from discussions with data center operators on renewing power purchase agreements at higher prices after existing contracts expire. The nuclear family Nuclear power has also benefited greatly, in part due to the Trump administration's measures to accelerate nuclear power development. Uranium producer Cameco (CCJ.US) has seen a big increase in stock price, and utility companies with a large share of nuclear power have also seen a rise in stock price. Even speculative bets have attracted interest, with the stock price of small modular reactor developer Oklo (OKLO.US) rising by three digits. This wave has spread to power equipment manufacturers as well. GE Vernova, which produces natural gas turbines (GEV.US), has seen its stock price roughly double as demand outstrips supply. This backlog of orders has also boosted companies producing smaller, faster-delivery equipment, including Carter's Incorporated (CAT.US) and Cummins Inc. (CMI.US). Fuel cell manufacturer Bloom Energy (BE.US) has been one of the standout performers, with its stock price rising several times this year. Even coal, usually considered to be in a terminal decline, has joined this bull run. Peabody Energy (BTU.US) has risen by about 50%, with the US Energy Corp predicting that coal consumption in the US will increase this year as power demand rises. However, high expectations leave little room for error. Most of the industry has already reflected optimism about the demand driven by artificial intelligence, meaning further gains will likely require continued positive developments, and disappointing news could quickly put pressure on valuations. Possible shift in AI sentiment JPMorgan's Strauss expects investors' focus to shift. He said that by 2025, widespread involvement in AI-related power demand will be enough to support stock prices. By 2026, the market may demand specific evidence - signed contracts, project announcements, and growing backlogs. This scrutiny may make some companies uncomfortable. Companies most directly related to artificial intelligence are already trading at premium valuations, with forward price-to-earnings ratios exceeding 30 in some cases. Bloom Energy's valuation levels are even higher. Valuations for equipment manufacturers riding the wave of electricity are also well above their historical averages. The riskiest areas may be companies with little or no current revenue, including early-stage nuclear developers and ambitious infrastructure projects. One such company, Fermi (FRMI.US), revealed this month that a potential data center client had withdrawn a $150 million construction funding commitment, causing its stock price to plummet. In contrast, renewable energy seems to be one of the few areas that have not priced in aggressive growth. Despite this year's rebound, the multiples for larger clean energy companies have remained relatively stable, indicating that profit expectations have not changed substantially. Scarcity has driven the gains in the industry so far, but could also create new bottlenecks. Wood Mackenzie analyst Joseph Shanlou said that as workers are drawn to data centers and gas power plants, engineering and construction capacity may be strained, slowing down projects like CECEP Solar Energy. These constraints could determine which companies ultimately emerge as winners. Analysts believe that as most of the upside potential has already been reflected in stock prices, energy stocks may find it increasingly difficult to continue to outperform easily in the coming year.