From MarketWatch:
Excerpts:
For two years, the power trade was the stock market’s favorite way to own the AI boom without paying Nvidia-sized multiples. Buy anything that generates electricity, the logic went, because every data center needs power and supply is short.
It worked. Independent power producers rerated like technology stocks, and utilities that spent decades as bond proxies suddenly had growth stories.
That blanket logic is now breaking down, with politics as the catalyst.
Voters are angry about electricity bills. Electricity rates rose 7.1% nationally in 2025, according to the Energy Information Administration’s measure of average retail revenue per kilowatt-hour, and are expected to keep climbing.
Brookings noted that a poll earlier this year showed a plurality of voters across party lines see data centers as a direct threat to their home energy costs, and both major U.S. political parties have discovered the issue works.
Every pending utility rate case between now and the November elections is a potential campaign ad.
Which utility stocks survive the next two years will be decided by whether tech companies or consumers pay for the AI build-out. The market has priced the bottleneck. It has not yet priced who gets stuck with the bill.
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